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Description: At the outset of independence 10 years ago, Kazakhstan's leaders promised that the country's rich natural resources, with oil and gas reserves among the largest in the world, would soon bring econo...

At the outset of independence 10 years ago, Kazakhstan's leaders promised that the country's rich natural resources, with oil and gas reserves among the largest in the world, would soon bring economic prosperity, and it appeared that democracy was beginning to take hold in this newly independent state. A decade later, economic reform is mired in widespread corruption. A regime that flirted with democracy is now laying the foundation for family-based, authoritarian rule. This book examines the development of this ethnically diverse and strategically vital nation. Kazakhstan: Unfulfilled Promise also looks at shortcomings of U.S. policy in the region and at the future challenges that Kazakhstan will pose to the United States and international institutions.

The Carnegie Endowment normally does not take institutional positions on public policy
issues; the views and recommendations presented in this publication do not necessarily
represent the views of the Carnegie Endowment, its officers, staff, or trustees.

decade ago few Westerners had heard of Kazakhstan, the second largest
A of the Soviet republics and a source of vast undeveloped oil, gas, and
other mineral reserves. After independence in 1991, Kazakhstan started to
appear in the Western news—first when the United States helped the Ka-
zakhs dismantle their nuclear weapons, and later when Chevron and
Exxon/Mobil signed agreements to develop major Kazakh onshore and off-
shore oil reserves. Now the country’s vast size, its oil and gas, and its pivotal
location make it of strategic importance to the United States, our Western
allies, and Kazakhstan’s two powerful neighbors: China and Russia.
The most multi-ethnic of all the states carved out of the Soviet Union,
Kazakhstan has been led through its independence and up to the present
day by Nursultan Nazarbayev, a president determined to make his country
into a bridge between Europe and Asia. Kazakhstan though suffers many of
the problems faced by Russia, with whom it shares a three-thousand-mile
border to the north; it too has spent the last decade working to establish the
structures and mechanisms that make civil society, markets, and govern-
ment work. The extent to which Kazakhstan has succeeded in these endeav-
ors and the degree to which it has veered toward the perils of corruption,
authoritarianism, and the suppression of civil society are the subject of this
book.
Martha Brill Olcott, a senior associate at the Carnegie Endowment and an
internationally respected expert on Central Asia, looks at the first decade of
Kazakhstan’s existence in the context of its political and historical legacy, its
geography, and its economic and social development. While the strategic
prize of Caspian oil and gas reserves remains an important factor driving
U.S. and other Western interests, Olcott shows that far more is at stake for
both the people of the region and U.S. interests than the successful
vii
viii | Foreword

building of transit routes linking Kazakhstan’s natural resources to the out-
side world.
The consolidation of political and economic power among a privileged
elite and an increasing intolerance of political dissent became the distin-
guishing characteristics of Kazakhstan’s state-building strategy in the late
1990s. Olcott argues that the United States and the international commu-
nity must not disregard these developments. The spread of radical Islam and
the rise of ethnic tensions have already posed serious problems for many of
the states that emerged out of the Soviet collapse. Kazakhstan inhabits a
complex part of the world in which its success or failure as a state will have
wider implications for its neighbors.
As the world’s attention focuses increasingly on Central and South Asia
in the aftermath of the September 11, 2001, terrorist attacks, Olcott’s tren-
chant analysis should be of particular interest to scholars and policy mak-
ers alike. We have seen that a failed state anywhere, but particularly in this
part of the world, can have far-reaching consequences. This book could
not be appearing at a more appropriate time.
Kazkhstan: Unfulfilled Promise will make an important contribution to
understanding the pitfalls of state building and the dangers these pose for
regional and global security. Perhaps nowhere was the granting of inde-
pendence more bittersweet and the challenges of sustaining it more complex
than in the case of Kazakhstan.
Jessica T. Mathews
President
Carnegie Endowment for International Peace
Acknowledgments

his volume has been nearly a decade in the making and would never have
Tgenesis
been possible without the financial support of a number of sources. The
of the project was a grant from the Smith Richardson Foundation,
which provided support to the Foreign Policy Research Institute (in
Philadelphia) for an early predecessor of this study in 1994. The Dean of
Faculty’s Office at Colgate University has also contributed to some of the
research costs of the project. Mostly, though, this book is the result of the
generous support of the Carnegie Endowment for International Peace and
its Russian and Eurasian program. Some of my travel to Kazakhstan was pro-
vided by the Central Asian American Enterprise Fund, on whose board of
directors I served from 1994 to 2000.
The opportunities that I had as a board member certainly contributed to
a deepened understanding of how Kazakhstan’s economy operates and first
sensitized me to the many shades of gray that color its landscape. I also ben-
efited from serving, albeit briefly and sporadically, as a consultant for sev-
eral Western energy and gold-mining companies. This experience
contributed to my understanding of the technical difficulties associated with
developing Kazakhstan’s resources as well as just how challenging it is to
mount a world-class project in the Kazakh environment.
Kazakhstan is no longer a remote and forbidding place. Unlike in my ear-
lier works, in this volume I am able to draw extensively on the written work
of other Americans who have done fieldwork in Kazakhstan. There is a
whole generation of young scholars who are making important contribu-
tions to the field; I have found the writings of Pauline Jones Luong (Yale Uni-
versity) and Bhavna Dave (University of London) particularly useful in this
endeavor and have benefited from my conversations with them. At various

ix
x | Acknowledgments

stages of the project I have also benefited from consultations with William
Fierman (Indiana University) and Gregory Gleason (University of New Mex-
ico), and Sally Cummings, all of whom have spent long periods conducting
research in Kazakhstan in recent years.
This volume could never have been produced without the advice and
assistance of my colleagues and former colleagues at Carnegie, both in
Washington and in Moscow, including Anders Åslund, Sherman Garnett,
Alexei Malashenko, and Galina Vitkovskaya. I also would like to acknowl-
edge research assistance by Judith Smelser and Maria Popova and the enor-
mous energy put into this project by Erik Scott and Marat Umerov. All four
have worked for me as junior fellows. I especially want to thank Natalia
Udalova Zwart, who has helped with the project since the very beginning,
and her successor at Carnegie, Marcus Fellman, who took over for Natalia
in 2001.
As always I am particularly grateful for the support and intellectual guid-
ance offered by my husband, Anthony Olcott, and for the forbearance of my
three children, Hillary, Andrew, and Alison Olcott.
Acronyms

he distinguished Nigerian novelist Chinua Achebe’s observations about
TKazakhstan.
his own country can easily be applied to the current situation in

The trouble with Nigeria is simply and squarely a failure of leadership.
There is nothing basically wrong with the Nigerian character. There is
nothing wrong with the Nigerian land or climate or water or air or
anything else. The Nigerian problem is the unwillingness or inability
of its leaders to rise to the responsibility, to the challenge of personal
example, which are the hallmarks of true leadership.1

In some ways, Kazakhstan was never as fortunate as Nigeria because it is a
landlocked state that began independence with a seriously damaged envi-
ronment. The legacy of colonial rule in Kazakhstan is much more uneven
than that in Nigeria; at least it seems that way to someone who is not a seri-
ous student of Africa and who seeks to compare the horrors of the Stalinist
system with the insufficiencies of British rule. Yet Kazakhstan began its exis-
tence as an independent country with many advantages, both human and
natural.
My purpose in writing this book is to provide a window into Kazakhstan
by offering an explanation for how and why its first president, Nursultan
Nazarbayev, established Kazakhstan’s family-based system of rule, as well as
the likely consequences of his actions. My goal is to show how the failure
of leadership in Kazakhstan came about. By describing the political,
1
2 | Introducing Kazakhstan

economic, and social evolution of Kazakhstan during the first decade of
independence and by providing a sense of how the country’s population has
viewed these developments, I show why the current system was not fore-
ordained. This volume is for those interested both in Kazakhstan and in
learning the details of its state-building efforts. It is also for readers who are
concerned more generally with the process of transition from communism
to independent statehood in the successor states of the Union of Soviet
Socialist Republics (USSR).
Despite the absence of a strong democratic tradition in Kazakhstan, the
country could have developed a pluralistic or quasi-pluralistic political sys-
tem and a transparent market economy if its leaders had only shown the will
to discipline themselves. In its first years, the country’s ruling elite at least
flirted with the idea of a transition to democracy and supported a thor-
oughgoing macroeconomic reform. But these promising beginnings were
abandoned over time, and now the country shows every sign of developing
into a family-run state. What is more, as in Nigeria, the United States and
other Western powers are reluctant to press too hard for political and eco-
nomic reforms for fear that their access to the country’s valuable natural
resources will be restricted. As I argue in this volume, however, the policy
choices made in Kazakhstan over the past decade may destabilize local
conditions and make long-term access to Kazakhstan’s riches all the more
difficult.
No single book can do justice to the complexities of state building in a
country as large, as resource rich, and as ethnically diverse as Kazakhstan.
In this volume I build on more than a quarter century’s study of this former
Soviet republic and its people. It is not my intention to reproduce or sum-
marize my earlier writings on the history of Kazakhstan (The Kazakhs), or
on the geopolitics of the area, which was the subject of Central Asia’s New
States.2 Instead, I seek to bring to bear my more recent experiences in study-
ing and traveling in the country and look in some depth at the past ten years
of developments in Kazakhstan.
This book provides an introduction to the challenges that faced the lead-
ers of Kazakhstan when the state gained independence a decade ago, why
those leaders were reluctant to accept independence, how they tried to cre-
ate a politically loyal population, what political institutions they used to do
this, how they tried to manage the country’s economic resources in the
process, and what major social and political rifts developed over the past
decade as a result of those policies. Finally, I look at what the next decade
Martha Brill Olcott | 3

in Kazakhstan might look like, and specifically at what may happen when
President Nazarbayev departs the political scene, as he must inevitably.

Why Kazakhstan Matters

The West has been drawn to the Caspian Sea with its billions of dollars of
oil and gas reserves that seem all the more important in the aftermath of the
September 11, 2001, attacks on the World Trade Center and Pentagon. The
war on terrorism unleashed by these horrific events makes global depen-
dence on Persian Gulf oil reserves seem more problematic, and the new
resources in the Caspian region and in Russia even more attractive. West-
ern businessmen and politicians had already been interested in the fate of
Kazakhstan, Turkmenistan, and Azerbaijan, where the bulk of the Caspian
reserves are found.
Of the three states, Kazakhstan’s reserves are likely to prove to be the
most significant, and while the country produces some eight hundred thou-
sand barrels of oil daily, the country’s leaders hold out hope that Kazakhstan
will turn into another Saudi Arabia in the next two decades. The country has
70.52 trillion cubic feet of gas reserves and at least 16.4 billion barrels of oil
reserves. The latter figure is likely to triple and could even increase sixfold
if the most optimistic estimates of Kazakhstan’s offshore reserves are fully
proved.3
Kazakhstan has been of interest to U.S. policy makers since its indepen-
dence because it was the only non-Slavic post-Soviet state to have inherited
nuclear weapons. It was also the site of a projected multibillion-dollar Amer-
ican investment. Independence meant that Chevron’s project to develop the
vast Tengiz oil field in western Kazakhstan, the first such project of its kind,
would require permission from government officials in Almaty instead of
from Soviet officials in Moscow, with whom the venture had originally been
negotiated.
The level of international interest in this vast nation, which is two-thirds
the size of the continental United States, has steadily increased over time.
While the claims that Central Asia will be a second Persian Gulf may turn
out to be vast exaggerations, the Caspian basin reserves remain a potentially
enormous windfall for Western energy companies and, with Russia, could
serve as an important alternative to the Persian Gulf. Caspian oil has been
exploited for nearly a century, but when the Soviet Union was intact,
4 | Introducing Kazakhstan

Western experts had limited knowledge of just how vast those reserves
were and little expectation of being able to play an active role in develop-
ing them.
Now, large Western oil companies believe it is critical to secure a part of
the Caspian reserves, especially because the governments in Kazakhstan,
Turkmenistan, and Azerbaijan seemed more interested in Western invest-
ment in their assets than did the government in Russia. This meant that the
conventional wisdom in Western policy circles concerning these states
quickly shifted 180 degrees, as Azerbaijan and the Central Asian states went
from being inconvenient additions to the international scene to being poten-
tial strategic assets. In 1991 the possible collapse of the USSR was viewed
as a threat to global security until just weeks before it happened, in part
because of what were seen as the “unstable forces” that might be unleashed.
The new states of Central Asia and the Caucasus lay on the edge of the “arc
of crisis,” a phrase frequently used in the late 1970s and 1980s to describe
the area from the Indian subcontinent to the Horn of Africa.4 This area, said
to separate the stable Western world from a non-Western Muslim one, was
precisely where Samuel Huntington later saw an impending “clash of civi-
lizations.”5
Instinctively, Western policy makers shied away from too direct an
engagement in that part of the world, and so, initially, the international
community was willing to grant Russia great latitude in the Soviet Union’s
former domains. The USSR was not simply a continuation of the Russian
empire; it was also a postimperial multinational state. The international
community had viewed Moscow’s suppression of the empire’s various
nationalities to be part of the general denial of basic political freedoms to
Soviet citizens and saw the democratization of the USSR as the remedy for
it. There was fear that the breakup of the Soviet Union would set a danger-
ous precedent and create new risks that outweighed the injustices of per-
petuating the Soviet system. Once the Soviet Union broke up, however, the
international community did not support the idea that Russia should
attempt to reconstitute it. In fact, to avoid the risks associated with this,
many diplomats initially argued that Russia had legitimate geopolitical inter-
ests in the contiguous former colonies and could realize these if it would
behave “responsibly.”
Over time it became more difficult to interpret Russia’s actions benignly.
The 1994 invasion of Chechnya served as a bloody demonstration of what
Russia was capable of, if provoked. Although not behaving nearly as ruth-
Martha Brill Olcott | 5

lessly beyond its borders as it did within its boundaries, Russia still used
heavy-handed pressure to induce reluctant states to join the Commonwealth
of Independent States (CIS).6 While claiming neutrality, it unabashedly
favored the Abkhaz secessionists over the Georgian government and helped
the Armenians in their war against Azerbaijan. In this environment, Russia’s
attempts to dictate Kazakhstan’s economic policy, especially in the oil and
gas sectors, were seen by many in the West as overstepping the bounds of
responsibility.
The Caspian region was described as vital to U.S. security. This stance was
first made explicit by then U.S. Deputy Secretary of State Strobe Talbott in a
July 1997 speech that he titled A Farewell to Flashman:

The United States has a stake in their success. If reform in the nations
of the Caucasus and Central Asia continues and ultimately succeeds,
it will encourage similar progress in the other New Independent States
of the former Soviet Union, including Russia and Ukraine. It will con-
tribute to stability in a strategically vital region that borders China,
Turkey, Iran, and Afghanistan, and that has growing economic and
social ties with Pakistan and India. . . . It would matter profoundly to
the United States if [internal and cross-border conflicts] were to hap-
pen in an area that sits on as much as two hundred billion barrels of
oil. That is yet another reason why conflict resolution must be Job One
for U.S. policy in the region: it is both the prerequisite for, and an
accompaniment to, energy development.7

U.S. commitment to Kazakhstan and Central Asia has grown with time,
and Strobe Talbott’s words seem more prescient after the United States dis-
patched troops to Uzbekistan as part of a military operation in Afghanistan.
Still, the challenges of state building in Kazakhstan have not been made sim-
pler by the greater strategic importance of the region or by increased inter-
national interest in its oil wealth. In fact, I argue the opposite is true. As with
leaders of so many other resource-rich states, demand for mineral reserves
has placed extraordinary temptations before Kazakhstan’s rulers, making
Western arguments for good government that much harder to sell. As I dis-
cuss more fully in the concluding chapter, this creates a conundrum for U.S.
policy makers. Caspian oil will be a strategic asset only if continued access
to it can be ensured; with inland deposits, this requires that the host coun-
try as well as the transit states all be stable.
6 | Introducing Kazakhstan

Thus, U.S. policy makers face the constant challenge of balancing long-
term and short-term policy interests: the need to remain on good terms
with the current rulers of oil-rich states, while trying to prevent them from
destabilizing their own societies. For the Clinton administration, the former
task was the more important, and short- and medium-term interests were
dominant. The focus became “pipeline politics” (that is, the fight over the
routes this oil would take to market). Securing the independence of the
Caspian states was termed a priority, and President Bill Clinton cited the
signing of a four-state pledge to create an East-West (Baku-Ceyhan) pipeline
as one of the most significant foreign policy accomplishments of 1999.8
Clinton’s message was quite different from that offered in late 1991 and
1992 when Secretary of State James Baker traveled the region trying to con-
vince the Central Asian leaders to embrace the union of economic devel-
opment and democratic principles. To make this point, when the USSR
collapsed, the United States recognized the independence of all the succes-
sor states but authorized the immediate opening of only two embassies in
the Central Asian region, in Kazakhstan and Kyrgyzstan. Certainly, the fact
that Kazakhstan had nuclear weapons played no small part in U.S. decision
making, but official U.S. statements emphasized that both Kazakhstan and
Kyrgyzstan were being rewarded for their commitment to democratic and
market reform.
Although embassies were later opened in all the newly independent
states, the symbolism of the two-stage process by which the United States
established full diplomatic relations was not lost on the leaders of the region.
These actions implied certain preconditions for strong U.S. support. Inde-
pendence had to be more than the mere transfer of power from Moscow to
republic-level Communist Party officials, who by now had become national
leaders. Power, and consequently a portion of the national wealth, had to be
shared with the people.
This message, brought home in a range of ways during the first few years
of independence, made all the region’s leaders somewhat uncomfortable.
The international assistance that the United States and other donor nations
offered to these states targeted projects designed to promote structural eco-
nomic reforms that create the legal environment necessary for the rule of law
and the protection of private property. Kazakhstan and Kyrgyzstan received
a disproportionate share of this aid because commitment to a radical restruc-
turing of society remained greatest in those two countries. It was also
assumed that Russia would serve as a model for the states of Central Asia
Martha Brill Olcott | 7

because the Russians were seen as natural leaders in that part of the world
and were assumed to be more deeply committed to the goals of economic
and political reforms than were these new neighbors.
These early policies seriously underestimated the amount of social, polit-
ical, and economic reconstruction that was necessary for any of the newly
independent states to make the transition to sustainable statehood. It also
underestimated the new states’ suspicion of Russia, as well as Russia’s lin-
gering dreams of empire, or at least neo-imperial domination.
The subsequent change in U.S. and Western attitudes continues to affect
the kinds of states that emerge in the region, and not necessarily for the bet-
ter. In the short run it makes these states more likely to survive because Rus-
sia has effectively been warned not to become the neighborhood bully.
Russia’s potential influence in this region may always have been exaggerated.
A U.S. military presence in Uzbekistan, however brief, seems certain to
diminish any future military threats from Russia, although it may lead to a
security void. In the long run the greatest sources of instability lie within the
states themselves. Geopolitics alone does not dictate outcomes in the state-
building process. If the income from the energy sector is not shared with the
general population and if the region’s leaders choose to use it primarily for
their personal benefit, who will provide a buffer for them from their angry
masses and from those neighbors who seek to be the patrons of disgruntled
elements in the population? The George W. Bush administration may well
find itself facing difficult choices in Kazakhstan and elsewhere in the
Caspian region in the next few years.
There is much to the old adage that history would not keep repeating
itself if we would only listen to it. It has taken the United States decades to
recover from the damage done to relations with oil-producing states through
its unsuccessful efforts to back those in power against the more radical
forces that oppose them. The histories of both Iran and Iraq might have been
much different had the U.S. foreign policies of the 1960s and 1970s been
less focused on regime stability and more focused on the long-term politi-
cal viability of these regimes. As we have seen in the Middle East, false steps
with one state can have a serious impact on U.S. relations with an entire
region and on the U.S. global strategy more generally.
The Cold War is at an end, and so too it seems is the post–Cold War. A
new period of global vulnerability began the day terrorists brought down
two of the world’s tallest buildings by turning passenger jets into flying
bombs. It is hard to imagine a more vivid example of the power of today’s
8 | Introducing Kazakhstan

radical forces—or of the new financial interests ready to bankroll them.
Today Afghanistan is the battlefield, and a long-smoldering conflict there
will only increase the likelihood that the regimes in Central Asia will also
become targets for radical Islamists seeking to oust secularists.
Corrupt regimes stimulate the development and popularity of radical
forces, and as I make clear in this book, some of the early auguries are dis-
turbing. Still headed by a Soviet-era figure, President Nursultan Nazarbayev,
the Kazakhs have yet to cope with the inevitable challenge of transferring
power to a new post-Soviet generation.9 At the same time, the process of
democratic institution building has all but halted in Kazakhstan after an ini-
tial phase in which Kazakh leaders had resigned themselves to taking such
steps as the price of good relations with the West in general and the United
States in particular. Over time the region’s leaders have become more adept
at rebuffing the implied conditionality of the early U.S. policy in the region,
and U.S. pressure has also become less sustained, making these men less
apologetic about their behavior. That the United States had to depend on the
hospitality of Uzbekistan’s strong-man President Islam Karimov to conduct
a military foray into Afghanistan is likely to render democracy a harder sell
to the region’s leadership and to make the United States less vocal in its
efforts to advance it.
All Central Asia’s leaders, including President Nazarbayev, claim that the
tradition and temperament of the Asian people make them little suited to
democracy. This seems a gratuitous justification for consolidating power in
the hands of the ruling elite. It is much more obviously the case that almost
none of these men has any instinctive attraction to democracy; rather they
seem to prefer replacing the grandiose public structures of the late Soviet era
with new and more massive presidential palaces, mosques, and museums.
Independence has brought vast new temptations, and this is especially
true in a resource-rich state like Kazakhstan. Kazakhstan’s resources seem
certain to be developed, but the conditions of corruption complicate the
process. Promised tenders have often gone sour, and those who have seem-
ingly won bids have sometimes been pushed into contractual default so
that the Kazakh government can gain new concessions. Given the difficul-
ties of shipping oil and gas from the region, the pace of development will
be slower and more complicated than was initially predicted, leaving the
United States continually to reevaluate its support for what could become
an increasingly less attractive regime. The fighting in Afghanistan in the
Martha Brill Olcott | 9

winter of 2001–2002 simply highlights the deteriorating security environ-
ment in the region more generally, which seems certain to provide Wash-
ington with a never-ending series of policy challenges.
That the United States chose to establish a military outpost in Uzbekistan
in late 2001 need not be indicative of how U.S. policy makers would
respond to a deteriorating political or economic situation in Kazakhstan.
After all, the United States was not responding to an appeal by the Uzbeks
to help preserve their domestic stability, but rather Uzbekistan became a
strategic asset for the United States to achieve its overarching goals.
The challenge before these states remains one of enhancing their own via-
bility. The second-term Clinton administration demonstrated a strong con-
cern for the fate of Central Asia, and the Bush administration seems headed
for even greater engagement, but neither independence nor U.S. policy has
yet to contribute much to improve the lives of the Central Asians. The long-
term security of these states requires that independence be something more
than a transfer of power from Moscow to the new national capitals. It must
also entail a meaningful transfer of rights and responsibilities to the popu-
lation itself.
The Soviet Union fell apart largely because Moscow failed to meet both
elite and mass expectations for promised economic and political reforms.
The leaders of Kazakhstan have inherited these same challenges, along with
a responsibility to manage billions of dollars in resources. Those dividing the
spoils must also deal with a socially and politically traumatized population.
True, the leaders of Kazakhstan and the other newly independent states
may claim that they have not caused these traumas, but with income dis-
parities growing and the disenfranchisement of the people increasing,
Kazakhstan’s leaders are quickly coming to the end of whatever grace period
the granting of independence afforded them. The nation’s Kazakhs still have
great pride in their new national homeland, but most other nationalities liv-
ing in the country have little sense of political empowerment. Although
foreign investment is steadily increasing and the economy may have already
passed its worst period, dreams of vast national wealth have yet to be real-
ized. What lies ahead is far from clear, but as I make explicit here, during
the first decade of statehood Kazakhstan’s leaders squandered much of their
opportunity to quickly right old Soviet wrongs.
10 | Introducing Kazakhstan

Blessed with Resources but Cursed by Geography

With vast untapped fossil-fuel reserves, substantial gold deposits, and rich
unmined veins of copper, chrome, and aluminum, Kazakhstan is a state of
enormous potential natural wealth. In fact, a Soviet geologist once boasted
that Kazakhstan was capable of exporting the entire periodic table of ele-
ments.10 It also has enough developed farm and pastureland to meet the
immediate needs of its population of nearly 15 million, of whom today
slightly more than half are Kazakhs.11 Given its natural resources, one would
think that Kazakhstan’s future is ensured, especially since it also has a
diverse industrially based economy (largely in ferrous and nonferrous met-
allurgy), sufficient to insulate the country from the risks associated with
resource-dependent development.
Despite all this, Kazakhstan began its existence as a fragile state and as a
country of paradoxes, a state crippled by its history as well as by its geog-
raphy. Both the Kazakhs and the Russians claim Kazakhstan as their home-
land, and while the current legal system favors the claims of the former, a
three-thousand-mile border with Russia creates a not-so-subtle reminder of
the risks associated with these potentially conflicting claims.
Kazakhstan’s economic potential is enormous because it combines nat-
ural and human resources. At the time of independence, Kazakhstan’s econ-
omy and industrial plants were fully integrated with those of Russia. Not
only did factories on both sides of the border supply one another, but the
energy grids and supply lines also traditionally ran north-south rather than
east-west. President Nazarbayev was well aware of the interdependency of
Kazakhstan’s economy with Russia’s, and to a lesser extent with the
economies of Kyrgyzstan and Uzbekistan. Given the limited exposure that
he and his first group of advisers had to the conditions of a market economy,
it was hard for him to imagine how foreign investment and international
technical assistance could help break those ties.
As I detail in chapter 5, with time the Kazakh leader came to better
understand the country’s economic potential, spurred in large part by a
level of international investor interest that far exceeded Nazarbayev’s initial
expectations. Kazakhstan has the highest per capita foreign investment in
the CIS. According to the Kazakh government, the country has received
some $13 billion in foreign direct investment (FDI) in its first decade of exis-
tence.12 This figure is somewhat misleading because it reflects investment in
planned projects as well as capital being directly injected into economic pro-
Martha Brill Olcott | 11

duction. As of the end of 2000, half of these investments had gone into the
oil and gas sector. The proportion of investment going into that sector is
likely to increase as Kazakhstan’s new oil fields move from an exploration
to an exploitation phase.
I also discuss how, outside the oil and gas sector, foreign investment in
Kazakhstan has been slower and more tentative than the government had
hoped. Investment in the oil and gas sector itself is behind schedule, slowed
in part because of the uncertainty of relations with Russia. Until the price of
oil jumped unexpectedly, the oil and gas industries produced far more limited
royalties and tax revenues, and still fewer jobs than were originally projected.
As I also detail in chapter 5, Kazakhstan has a difficult business climate
that is keeping some potential investors away. The legal infrastructure gov-
erning foreign investment is far from complete. While the rights of foreign
investors are now relatively well established compared to other states in
the region, they have not yet been fully tested. The existing laws governing
property change frequently, even if only subtly, putting most foreign invest-
ments at potential risk, and the profitability of most large projects requires
the negotiation of legal exclusions and tax holidays. In the absence of an
independent judiciary and commercial arbitration system, the concessions
granted to investors cannot be guaranteed to survive the life of the projects.
The allocation of contracts and resource development rights to foreigners
has not always proceeded smoothly. Several big mineral resource extraction
projects have been scandal-ridden after Western firms were pushed out of
deals they thought were firm, or they were forced into expensive new nego-
tiations. Stories of business people pulling out of smaller projects are also
commonplace.
Similar problems have also crippled independent Kazakh entrepreneurs,
erecting a formidable glass ceiling beyond which those lacking protection
cannot venture. In some ways, and most troubling of all, the reach of the
official family—including the president, his wife and her family, their daugh-
ters, and their sons-in-law—is increasing. Their holdings must now be reck-
oned with in most of the major sectors of the economy.
The consolidation of economic power in a few hands also threatens to
disrupt the country’s precarious ethnic balance. At independence Kazakhs
accounted for only about 40 percent of the population of the country; about
37 percent of the population were ethnic Russians.
President Nazarbayev tried to turn the country’s demography and geog-
raphy into a national asset, after referring to his nation as a bridge between
12 | Introducing Kazakhstan

Europe and Asia. Not only does the country straddle the two continents, but
its history is rooted in the two civilizations and its population is nearly
evenly divided between European and Asian peoples.13
Unfortunately, a skillful turn of phrase is not sufficient to create an inter-
national role for Kazakhstan. To date, as I explore at considerable length in
chapter 3, this claim has proved to be little more than a public relations
effort designed to make an asset of Kazakhstan’s geographic and demo-
graphic positions and to raise the stature of the man who leads the nation.
So, while Kazakhstan claims to be the most multinational of the Soviet suc-
cessor states, with over a hundred nationalities represented in the republic,
in reality the history of the past decade has been that of the political empow-
erment of one national group, the Kazakhs, at the expense of all others. Both
Kazakh nationalists and the Kazakh population at large view independence
as the restoration of Kazakh statehood.
The Kazakhs were a pastoral, nomadic people of Turko-Mongol stock
who began to consolidate in the fifteenth century by organizing themselves
into three groups, or zhuzes, commonly termed hordes. The Small Horde
had its territory on what is now western Kazakhstan, the Middle Horde in
north-central Kazakhstan, and the Great Horde in southern and southeast-
ern Kazakhstan. Territorial domination was a relative concept for the
Kazakhs, given the nature of the nomadic livestock breeding economy,
although each Kazakh aul (the migratory unit) had fixed routes and pas-
turage during their annual migratory cycle. The three hordes were loosely
unified from the first quarter of the sixteenth century to the last quarter of
the seventeenth century. When Kalmyk Mongol tribesmen began moving
west and started taking control of Kazakh pasturelands, the khans (chief-
tains) who ruled the Small and Middle Hordes sought protection from Rus-
sia’s ruler, swearing allegiance to the Russian tsars in 1731 and 1740,
respectively. The khans, however, did not anticipate that this allegiance
would ultimately lead to the colonization of their lands and to a blurring of
territorial boundaries between their people and the Russians. The Kazakhs
understood it as an alliance of a weak ruler to a stronger one, but the Rus-
sians viewed it as the prelude to fuller control, which was exercised by the
forcible conquest of the Kazakh lands in the late eighteenth and early nine-
teenth centuries.
Many Kazakhs maintain that from that time on their ancestors suffered
at Russian hands, continuing up to the Alma Ata Uprising of 1986,14 when
Kazakh protesters were killed during demonstrations provoked by the
Martha Brill Olcott | 13

replacement of longtime Kazakh party leader Dinmuhammad Kunayev by
a Russian from outside the republic. In honor of this event, December 16
was chosen as Kazakhstan’s independence day. Kazakh nationalists go so far
as to accuse the Russians of making three separate attempts at genocide of
the Kazakh people. The first was the famine of the 1890s, when after sev-
eral harsh winters the Kazakhs were turned away from traditional pasture-
lands to make way for Russian settlers. The second began with the
deportation of hundreds of thousands of Kazakhs in the aftermath of a
failed anti-Russian uprising in 1916, which was then quickly followed by
the famine and epidemics of the Civil War from 1918 to 1922. The worst
Russian treatment of the Kazakhs resulted from the policies of collectiviza-
tion in the 1930s, which left four to six million Kazakhs dead and irrevo-
cably shattered their traditional pastoral livestock-based culture. The
Kazakhs never fully recovered from this blow, because after World War II
Soviet authorities once again drove Kazakhs from traditional lands in the
northern part of the republic to make way for European settlers during the
Virgin Lands drive of the 1950s. Even the name of the campaign was an irri-
tant, for it implied, erroneously, that these steppe lands were vacant until
Russian settlers were sent to farm them.
The Kazakh government has been working with Kazakh nationalists to
think up ways to compensate the population for the injustices it and its
ancestors suffered. As we see in chapter 6, the government has had a formal
demography policy, including programs to resettle the Kazakh diaspora
community and incentives for Kazakhs to have large families. These policies
are designed to make the Kazakhs—currently constituting almost 54 per-
cent of the population—the overwhelming majority population as quickly
as possible and to secure ethnic Kazakh control of those parts of the coun-
try that were ethnic Russian enclaves. In the process Kazakhstan’s govern-
ment is not above gerrymandering electoral, and even territorial, districts to
create Kazakh majorities wherever possible. Soviet administrative bound-
aries were designed to achieve one set of outcomes—effective management
by Moscow—and the new Kazakh ones are designed to maximize control
of the new national elite.
Most Kazakhs do not believe that the primary task of state building
should be to redress the wrongs of history. They accept Kazakhstan as a
multinational state and are generally willing to grant Russians the same
rights as Kazakhs if those Russians are prepared to learn the history, lan-
guage, and culture of the people for whom this new country is named.
14 | Introducing Kazakhstan

The country’s Russian population, however, is not willing to do this.
More than a quarter of Kazakhstan’s Russian population, upwards of two
million since 1992, has left the country in little more than a decade rather
than accept this change of status.15 Ethnic Russians also feel aggrieved and
are angry that the USSR simply disappeared, leaving them unaccountably
transformed from a majority into a minority population.
Few of the country’s ethnic Russians believe that the Kazakhs have any
real claim to statehood, and most regard the Kazakhs as a late-emerging and
incompletely developed people who would have had little or no sense of
national identity had the Soviets not “given” them a homeland. Contempo-
rary literature suggests that the prerevolutionary settlers saw themselves as
frontiersmen, and at the time of independence only about half of
Kazakhstan’s Russian population had roots in the republic that went back
more than fifty years. The majority of Russians were the descendants of
Soviet-era settlers who either came or were sent to a remote part of their
country. Most local Russians, however, have adopted the mind-set of the
descendants of the early settlers who regard Kazakhstan as part of a Russ-
ian frontier region that had no precise boundary. For the Russians, the first
postindependence constitution, adopted in January 1993, was a particular
blow, referring as it did to Kazakhstan as being “the home of the Kazakh
people.”16 Kazakhstan’s Russian population had understood it to be the
home of the Russian people as well. Those who lived in northern
Kazakhstan believed that they had been living not just in the Soviet Union
but on Russian soil since Kazakhstan had been a constituent part of the
Russian Federation until 1936.
Such historical battles are of little interest to the remaining 20-odd per-
cent of the population who are neither Kazakh nor Russian. They are more
concerned with having the government maximize the discretionary rights of
linguistic and cultural minorities. While many non-Kazakhs are most sym-
pathetic to the Kazakhs’ past maltreatment by the Russians, they see such
grievances as being against governments that are now defunct, and so, they
feel, these historical wrongs should not be righted at their personal expense.
In chapter 3, I explain how Kazakhstan’s government has tried to respond
to the challenge of the country’s multi-ethnicity by designing a constitution
that offers the representatives of all nationalities in Kazakhstan equal pro-
tection before the law. The country’s leaders, however, are as much trapped
by the vestiges of the Soviet understanding of nationality as are the coun-
try’s citizens.
Martha Brill Olcott | 15

Nationality has a central place in Kazakhstan and naturally bestows on
ethnic Kazakhs a position of relative privilege. One of the great ironies of the
Soviet system was that although nationalism was always viewed as a major
threat to the stability of the allegedly internationalist Soviet state, national-
ity was used as the primary sorting principle in Soviet society. Every young
Soviet citizen acquired an internal passport at age sixteen, and from that
point on his or her nationality was fixed for life. Generally, one took the
nationality of one’s father, although people of mixed parentage were some-
times able to choose. However, someone with two Ukrainian parents, for
example, could not declare himself a Kazakh, even if he (and his parents and
grandparents before him) had been born in Almaty.
Even in the Soviet period, a Ukrainian living in Kazakhstan would have
felt some sense of living “abroad.” Soviet publications written in Ukrain-
ian might have been available at a cultural center but were not sold at
newsstands, and of course local television and radio programs would have
been only in the Russian or Kazakh languages. Travel to Ukraine was cheap
but indirect, and telephone service was inexpensive but of poor quality.
Children could be sent to Ukraine to study, increasing the likelihood of a
job assignment in Ukraine upon graduation. Kazakhs and Russians were
also free to go there, and many did. In fact, President Nazarbayev tried
unsuccessfully to get his parents to allow him to go to the Kiev17 Institute
of Civilian Aviation in Ukraine.18 His parents, though, pressed him to
remain close to home, as was typical for a Kazakh child raised in a tradi-
tional rural setting.
The USSR was a place of paradoxes. The state set cultural and ideologi-
cal homogenization as an explicit goal. At the same time, though, the state
was organized into a federation with greatly enhanced rights for ethnic com-
munities within the territories that bore their names. Thus, without intend-
ing to do so, the regime set up a system in which the boundaries between
ethnic communities were made to appear immutable, and national com-
munities saw the preservation of their cultural and linguistic differences as
their primary goal. This system generally leveled the political salience of
nationality for those peoples with historic legacies of nationhood and for
those groups whose ethnic consciousness was redefined as a result of Stalin-
era social engineering. Few Soviet peoples remained politically acquiescent
during the late Gorbachev years, when the policies of glasnost and
perestroika stimulated a heightened national consciousness and led to
demands for political independence.19
16 | Introducing Kazakhstan

This was not the case in Kazakhstan. As this book emphasizes, one of the
main challenges to state building in Kazakhstan is that independence was
not achieved as the culmination of a popular struggle. Independence was
“awarded” at a gathering of Soviet republic leaders, from which Nazarbayev
was absent.20 For most people living in the Soviet Union, the collapse of the
USSR exaggerated the importance of nationality over citizenship. It was
rapid and unexpected and so demonstrated that citizenship is mutable. At
the same time, ethnic identity, based on blood, seemed immutable and able
to form a legitimate basis for political empowerment.
Given the potential volatility of Kazakhstan’s demographic situation, ini-
tially Kazakhstan’s rulers made some tentative efforts to model themselves
after multi-ethnic states such as the United States, but they quickly tired of
the effort, citing the inappropriateness of the comparison. I argue that this
was a mistake. The myth of the United States as a “melting pot” has long
been replaced by the recognition that some groups were forcibly incorpo-
rated, brought in as slaves, or had their homelands involuntarily annexed.
There is also now the admission that not all groups have been equitably
treated. Complete assimilation is no longer expected and has been replaced
by a desire to balance political oneness with ethnic differentness. Reference
to “we the people” of the United States no longer immediately evokes an
image of a white Anglo-Saxon,21 as citizenship is now expected to be eth-
nically blind, and groups appeal to U.S. authorities when they feel that the
neutrality of the system is being violated.
In the post-Soviet world no one really expects the state to be neutral, but
rather to favor those whose homeland the country “really” is. As I detail in
chapters 2 and 3, this legacy of Soviet-era understandings of nationalism
creates a real burden for Kazakhstan’s leaders. State documents talk of the
“Kazakhstani people,” a reference to all the citizens of the state, but
Kazakhstan’s citizens do not think of themselves as one people.
Kazakhstan’s constitution speaks of the equality of peoples regardless of
nationality, a point that is repeatedly made by President Nazarbayev and
other leading Kazakh figures. Yet few believe that these statements reflect the
actual conditions in their country, and the appointment of an ethnic Kazakh
to replace a non-Kazakh is almost always interpreted as an ethnic slight.
As I explain in chapter 6, life for local Russians contains daily small
slights, which Kazakhs defend as simply natural parts of the state-building
process. One of these was to switch the spelling of the country’s official
name from Kazakhstan to Kazakstan (in 1995), to better reflect Kazakh pro-
Martha Brill Olcott | 17

nunciation (from Kh to K in the Cyrillic alphabet). Two years later the
Kazakh government switched the spelling back to Kazakhstan in interna-
tional usage but left the official spelling at home unchanged, a seemingly
needless irritant. The Russian mass media retaliated by continuing to use the
“Kh” throughout, claiming that the alternative was difficult to pronounce.
Plans to switch written Kazakh from the Cyrillic alphabet to Latin script are
exacerbating already sore feelings. But the biggest irritant, from the point of
view of the Russians, is that they are being forced to learn and speak Kazakh,
which the Kazakh constitution says must exist side-by-side with Russian and
eventually come to dominate it.
Those who do not speak Kazakh are not appeased by formal declarations
that preserve Russian as a language of “international communication.”22 In
chapter 6, I also discuss the difficulties of making the Kazakh language and
culture equal to Russian, to say nothing of replacing it, because at the time
of independence almost no non-Kazakhs, and not even all ethnic Kazakhs,
spoke Kazakh. Most Kazakhs, though, are sympathetic to the idea that the
Kazakh language should have a place of privilege because Kazakhstan is the
Kazakhs’ home. More than any other kind of legislation, the new laws mak-
ing Kazakh the official language of the state and mandating its use in a vari-
ety of public arenas clearly create a shift both in actual and perceived
economic and political empowerment.

Gaining Confidence with Time

In this book I discuss how, with time, Kazakhstan’s leaders have grown
more confident in advancing the national cause of the Kazakh people and
are doing so in a way that increasingly works to their own personal advan-
tage. In chapter 2, I describe how Kazakhstan’s leaders were convinced ini-
tially that their country’s state-building strategy had to be driven by its
location, requiring Kazakhstan to demonstrate continuing sensitivity to Rus-
sia’s preferences for the kind of state their country should become.
At the time of independence Kazakhstan was more economically depen-
dent upon Russia than was any other former Soviet republic. While
Kazakhstan’s dependence is being both reduced and redefined,23 it will be
far more difficult to circumvent the need to ship goods across Russia, head-
ing both east and west. New or expanded transport links facilitate shipping
across China to Asia, across the Caspian to Azerbaijan, and across Iran to
18 | Introducing Kazakhstan

Europe, but the freight capacity of these routes will remain restricted well
into the future. Using most of the new routes for shipping fossil fuel to
markets is problematic, until at least 2005 or even later.
In chapter 5, I examine how, in the first years of independence,
Kazakhstan’s government had only partial control over the country’s eco-
nomic wealth. Chevron’s development of the Tengiz oil field was delayed for
several years until the major partners in the transaction gave Russia an eco-
nomic interest in allowing the project to succeed. There was also the prob-
lem of the unresolved status of the Caspian Sea and Russia’s earlier
opposition to Kazakhstan’s putting up for tender the development rights for
these reserves. Leading Russian industrial interests also laid claim to equity
shares in Kazakh projects in other sectors too, and as we see in chapter 5,
they dominated ferrous metallurgy in Kazakhstan in the early years.
All this uncertainty initially made Western partners very cautious of
investment in Kazakhstan, and although Kazakhstan is developing strong
new economic strategic partnerships, Russia remains important because it
is able to assert influence by leveraging the grievances of the local Russian
community. Russia’s leaders believe that they should enjoy postimperialist
rights and privileges, including the ability to oversee the fate of their
stranded co-nationals, and they were vocal about asserting this in the first
years after the Soviet collapse. At that time, as I explain in chapter 5, Rus-
sia had only a minimal interest in repatriating Kazakhstan’s Russians and was
far more interested in pressing Kazakhstan’s leaders to accept suitable terms
for the citizenship of ethnic Russians in Kazakhstan.
The ethnic Russian population is Kazakhstan’s Achilles’ heel. Disrupting
established trade patterns between Russian and Kazakh firms meant unem-
ployment for ethnic Russians, who accounted for the majority of workers in
Kazakhstan’s factories and mines. The Kazakh government had no way to
gauge the level of patience for decreasing standards of living of any part of
the population. Improved economic relations with Russia served
Kazakhstan’s short-term interests but seemed likely to harm the long-term
economic development of the country.
Kazakhstan’s development strategy has been to try to balance the two
options, seeking to promote Western investment and involvement while
institutionalizing close economic ties with Russia. Although maximizing
foreign investment requires implementing a free trade or at least a low-
tariff regime, stabilizing economic relations with Russia may well entail
accepting the economic interdependence of the two states and setting up
Martha Brill Olcott | 19

preferential relations that foreign investors may find troubling. These two
strategies are potentially at odds with each other, and Kazakhstan’s economy
is moving forward without fully addressing this basic contradiction.
Kazakhstan’s foreign policy was also initially dominated by its desire not
to antagonize Russia and a drive to integrate with it. The Kazakh govern-
ment remained an advocate of a strong CIS long after most other leaders had
grown disenchanted with it, and the Kazakhs also supported a variety of
other plans that called for greater integration with Russia. Nonetheless the
Kazakhs were regularly at odds with Russia’s leadership because of Kazakh
insistence that the proposed or existing CIS institutions be formed of equal
partners.
In chapter 2, I also describe the tension that existed in the area of secu-
rity relations. For the first years after independence the military forces of the
two nations were closely intertwined, and it seemed clear that Russia’s secu-
rity needs would drive Kazakhstan’s agenda. Kazakhstan’s stance has become
more independent in recent years. As the Nazarbayev government has
striven to ingratiate itself with the United States and other Western nations,
it has also begun to better understand the limitations of geography and so
has been careful not to diminish its options vis-à-vis Moscow. Kazakhstan
joined the Partnership for Peace, takes an active role in the North Atlantic
Treaty Organization (NATO)–sponsored Central Asian Peacekeeping Bat-
talion (CENTRASBAT), and has offered the United States access to its air-
space and military facilities as Washington prepared for war in Afghanistan
in 2001. At the same time the Nazarbayev government has negotiated a
series of ever more inclusive agreements with Russia covering security as
well as economic issues. Kazakhstan has also been an enthusiastic member
of the new Shanghai Cooperation Organization.24
As I detail throughout the volume, in the course of the past decade,
though, Kazakhstan’s leadership has become less concerned with appeasing
Russia and is no longer overly sensitive to the concerns of the ethnic Rus-
sians living in Kazakhstan. One important gesture in this regard was
Nazarbayev’s decision to move the capital of the nation from Almaty to
Akmola (renamed Astana) on December 10, 1997. This action, which I
describe at greater length in chapters 4 and 6, moves the nexus of power
from the southeast corner to the north-central part of the country and thus
much closer to Russia. It is no accident that Nazarbayev chose a visit by then
Russian Prime Minister Viktor Chernomyrdin to declare the transfer of
Kazakhstan’s seat of power.25
20 | Introducing Kazakhstan

Trapped between Western Pluralism and Asian Autocracy

With time Nazarbayev realized that Russia was growing weaker while
Kazakhstan was growing stronger. These perceptions were reinforced by
shifting international attitudes toward both Russia and Kazakhstan. The
growing international interest in Kazakhstan has also had a real and negative
impact on political institution building, which is my subject in chapter 4.
Outside powers have sent the Kazakhs conflicting signals over the past
several years. On the one hand, the United States in particular and other
Western powers somewhat more tentatively have pressed Kazakhstan to
create a regime that upholds basic democratic traditions. These countries
want Kazakhstan to employ practices such as the full enfranchisement of the
population, equal civil rights for all ethnic groups, fair competition for polit-
ical power between contending groups, and equality of economic and social
opportunities across ethnic lines. At the same time, Western leaders are
eager to ensure that their companies are well positioned to develop
Kazakhstan’s oil reserves. So, while they may be sympathetic to human
rights and other political opposition groups that have seen their sphere of
action sharply reduced in recent years, these same leaders are unlikely to do
much more than invoke mild rebukes to the offending Kazakhs, and some-
times they are reluctant to do even that. Take for example the state visit of
President Nazarbayev to the United Kingdom in November 2000, when he
received the Order of St. Michael and St. George from Queen Elizabeth II,
at the very time that Western newspapers were filled with articles of the theft
of state assets by the Kazakh president and other family members.
The Kazakh leader, of course, has never admitted to any malfeasance. He
claims that the Western press maliciously distorts the truth (see chapters 6
and 7) and tries to control his international image by keeping Western
lawyers, lobbyists, and public relation firms on retainer. Publicly, the Kazakh
leader explains that any shift in political emphasis that has occurred is nec-
essary for the country to work out its national identity, and until that takes
place, the country cannot withstand a succession crisis.
The truth is that Kazakhstan’s leaders now feel that its valuable resources
and the heightened Western interest in them give the Kazakhs the freedom
to establish their primacy and to benefit personally from Kazakhstan’s vast
wealth. This has led the government to adopt a state-building strategy that
emphasizes the need for political stability even at the expense of political
participation. Over time, the Kazakh government has grown increasingly
Martha Brill Olcott | 21

afraid of what popular empowerment can bring and has restricted the scope
of electoral politics. It is my contention that no utility is derived from lim-
iting political participation and that Kazakhstan’s best state-building strat-
egy would be to grant each of its ethnic groups equal access to the
institutions of power in order to foster loyalty to the state. This does not
mean that the government should not or does not want the population to
be politically loyal. Its goal, though, is to insulate political outcomes from
popular choice.
Even more important is that few of Kazakhstan’s leaders truly believe
that popular participation is necessary to legitimate the state. Most of them
still believe as the old Soviets did, that popular will can be shaped through
ideological indoctrination, and they simply underestimate the difficulty of
the task (see chapter 3). The Soviet Union had a fully integrated ideologi-
cal system, with media, education, and the arts all mobilized to serve the
state’s goals. As I show in subsequent chapters, the means currently at the
disposal of the Kazakh elite are far more limited, restricted in part by its
interest in developing a global reach for the economy.
Much of the elite consolidation of power has been justified as restoring
Kazakh nationhood. Yet the nature of the unique historical role the Kazakhs
intend to play is still unclear. The symbolic import of the government’s
message has been somewhat vaguely conveyed, the Kazakh government
claiming that it seeks to combine European traditions with Asian ones.
The Kazakhs understand an Asian approach to be one that legitimates the
policies of political crackdown when they serve the purpose of economic
transformation. Once economic recovery is ensured, they promise that polit-
ical democracy will be introduced. The evolution of South Korea, Taiwan,
and Singapore is often cited as proof of the soundness of such a strategy, but
as I argue, it is also not clear that the Kazakhs have the will for self-discipline
that the “Asian tigers” have often demonstrated. Seeking to sacrifice due
process in the name of economic necessity, Kazakh leaders also do not yet
accept the need to be European, nor do they accept the contention that a
civil society offers the legal infrastructure that is necessary for the protection
of private property.
Ironically, the government’s strong commitment to pursue macroeco-
nomic change was initially used to justify a consolidation of power in the
executive branch. President Nazarbayev argued that without such a con-
solidation, Kazakhstan would fail to develop the legal infrastructure neces-
sary to secure private property and attract foreign investment. This was a
22 | Introducing Kazakhstan

point Nazarbayev hammered away at in the spring and summer of 1995
when he dissolved parliament and urged amending the constitution to make
the parliament less fractious. Kazakhstan would be a strong presidential
republic for a long time, he said in August 1995, because “we lack a parlia-
mentary culture and traditions and a well-developed multiparty system.”26
Since his reelection as president in January 1999, there has been further talk
of increasing the powers of the presidency, and even of making it hereditary,
a decision that if taken will be done without an open popular debate.
Parliaments are by nature a brake on executive power, and what President
Nazarbayev saw as a fractious parliament was one that others viewed as a
legislature trying to learn how to do its job. The Kazakhstan parliament
certainly held up government plans for privatization of the economy, but
many parliamentarians blocked the government proposals not so much
because they distrusted the institution of private property, but because they
objected to the abuses of the allocation process.
As I demonstrate in chapter 4, there is no institution in Kazakhstan capa-
ble of providing legal protection or balancing the president’s power. There
is a story told that over drinks after a dinner in 1990, a Russian adviser, sent
from Moscow to help with the problems of political institution building,
chided Nazarbayev, saying that he seemed more of a benevolent dictator
than a democrat. The Kazakh president is said to have responded that of all
three words, the only one he understood was dictator.
Even if the tale is apocryphal, Nazarbayev seems to have tired of text-
book-style democracy quickly once he learned how difficult it is to control.
The Kazakh government maintains that the population has supported it in
these efforts, often citing public opinion polls that show that people are
more concerned with the maintenance of public order than with having a
strong say in how their country is ruled. Nevertheless, President Nazarbayev
has sought to maintain the fiction that Kazakhstan has a quasi-participatory
model of rule. He has used public referendums to extend his term of office
and constitutional reforms that substitute a weak bicameral legislature,
elected by a complex and elaborate procedure, for a somewhat stronger
unicameral one. He then ran for the presidency “on a competitive basis,”
having ensured that he faced no serious competition. Smarting from West-
ern criticism, Nazarbayev promised to make the 1999 parliamentary elec-
tions more democratic, only to have those elections again fall short of
international norms. Since then, he has taken steps to attempt a dynastic
succession.
Martha Brill Olcott | 23

President Nazarbayev and his advisers have been trying to build the
foundation for patriotism in Kazakhstan by guessing at what the population
wants, rather than allowing the people to state their own desires. They jus-
tify this by arguing that popular rule might lead to the exacerbation of eth-
nic conflict. Although it is true that Kazakhstan is an ethnically divided
society, the argument that ethnic differences would turn violent if the pop-
ulation were accorded greater rights of self-government is generally based
on inappropriate analogies. Russians and Kazakhs have virtually always
lived close to one another peacefully, and, with the exception of the 1916
uprising, ordinary Russians were never held responsible for the excesses of
the previous state policy.27
Promoting political exclusion is always potentially dangerous since it
requires a subject population that is either passive or loyal. Lacking that, the
government must be confident that it has the capacity to make a sufficiently
effective use of force to ensure the population’s submission. It is far from clear
whether any of these preconditions are in place in Kazakhstan. The many
divisions that are beginning to typify Kazakhstan include: growing intra-
ethnic splits within the Kazakh population that could compound intereth-
nic ones, growing gaps between rich and poor, increasing regional
differences, and the growing alienation of Islamic activists. While Kazakhstan
has a growing and increasingly more visible security apparatus, the effec-
tiveness of that apparatus is still untested, providing little evidence that it will
be effective at anything more than suppressing isolated cases of dissent.
Western democratic theory is based on the premise that political partic-
ipation makes people stakeholders and that this helps to create the sense of
political community that forms the basis of political loyalty and patriotism.
It may be convenient for Western leaders occasionally to ignore the ways
that regimes try to insulate themselves from public pressure in oil- or other
resource-rich states, but the affected populations need not indefinitely
remain a submissive party to the indifference of their leaders and of other
nations to their fates.
If people lack a sense of political community, they will feel no loyalty to
the state in which they live, and public order will be ensured only as long
as apathy prevails. Apathy, though, is a far less reliable political force than
is patriotism. By promoting stability at the expense of participation, the
Kazakh elite has effectively stunted the process of building a new Kazakh
state and may eventually have to turn to the international community to
become the guarantor of Kazakh independence.
2

Reluctantly Accepting Independence

ensitive to the often unpleasant fates of small and ethnically divided
S states that border on more powerful ones, President Nazarbayev initially
sought ways to trade sovereignty for Kazakh domination of a territorially
integral Kazakhstan. Nazarbayev’s goal was to level the playing field for
Kazakhstan as much as possible so that his country would be no weaker
than any of the other Soviet successor states. Nazarbayev feared that to
press for a strong, Kazakh-dominated country was to risk antagonizing Rus-
sia and so to put the security of his newly independent country at risk. He
did not want the ethnic Kazakhs to have less control of their country than
did his former Soviet neighbors. Nazarbayev had the ambition to play the
role of an international leader and wanted to ensure that Kazakhstan did not
pass from the world’s stage. In these early years, many, including the lead-
ers of the newly independent nations themselves, saw independence as
potentially illusory. Nazarbayev’s solution was to influence his fellow pres-
idents to develop a shared understanding of how to regulate relations with
Russia to common advantage.
From the onset, Kazakhstan’s leaders recognized that building a viable
and stable independent state would require a great deal of diplomatic finesse
since no one could easily protect this landlocked state from the effects of
Russian displeasure. The juridical hurdle of statehood was crossed in late
December 1991, when the international community recognized the repub-
lic of Kazakhstan. The psychological hurdle of statehood is decreasing with
time but has not disappeared.

24
Martha Brill Olcott | 25

Most Russians see no natural dividing line between Kazakhstan and Rus-
sia, despite the fact that the Kazakhs believe there is. But with every pass-
ing year, even though they are still not fully delineated, the current borders
take on more legitimacy. There remains, however, a lingering hope on the
part of many Russians—and even some Kazakhs—that the two states and
the two peoples will someday be formally reunited.
Russia’s psychological barrier to accepting Kazakh statehood was a fac-
tor in interethnic relations in the republic even before independence, but it
became much more salient once Kazakhstan’s independence was pro-
claimed. Russia viewed the rising Kazakh ethnic sense of self-awareness
and the ensuing distrust and frustration among the Russian population as
a potentially explosive concoction, and one that Russia need not sit quietly
by and tolerate.
The great military imbalance between Kazakhstan and Russia is an
unequivocal warning that in the event of a conflict between Kazakhstan’s
two largest ethnic communities, Russia could easily partition Kazakhstan,
taking the northern lands to which it claims historic rights. In the first years
of independence it was not obvious how the international community
would respond to such a usurpation of power, especially if Russia were to
make skillful use of local Russians as surrogates and intervened for their pro-
tection. The Kazakh leadership was also acutely aware of its country’s strong
economic dependence on Russia, which was especially profound at the time
of independence.
That President Nazarbayev was one of the most forceful advocates of the
preservation of the USSR should be no surprise given Kazakhstan’s vulner-
able situation. After the demise of the USSR, no one worked harder than
Nazarbayev to find a new formula for integrating the former Soviet republics
into some form of effective multilateral organization, one in which each
member state was effectively the equal of all others. Initially Nazarbayev
believed that this was the best way to advance Kazakhstan’s interests, but as
he grew more confident of his own skills, as well as with Kazakhstan’s inher-
ent hold on statehood, the Kazakh leader became more interested in a junior
partnership with Russia. Still, Nazarbayev’s preoccupation with integration
took precedence over the pursuit of economic development and political
institution building.
26 | Reluctantly Accepting Independence

Nazarbayev and Kazakhstan

It is difficult to separate the process of state building in Kazakhstan from the
personality of its first and, as yet, only president. President Nazarbayev’s
advocacy of a policy of integration helped ensure its support by the popu-
lation, even though such a strategy on the surface might have seemed anti-
thetical to the interests of a newly independent state.
Nazarbayev’s will has just about always been translated into state policy,
initially because he was strongly supported by the population and later
because he had created the institutions necessary to buffer him from pop-
ular criticism. Appointed Kazakhstan Communist Party first secretary in
1989, Nursultan Abishevich Nazarbayev assumed the title of president of his
Soviet republic in March 1990, at the same time that most other republic
first secretaries expanded the base of their authority. He ran unopposed in
the popular election in December 1991 (his most likely competitor had
failed to get the 100,000 petition signatures necessary for him to appear on
the ballot) and received 98 percent of the vote, with more than 80 percent
of eligible voters participating.1 Next, he opted to avoid a more competitive
election, scheduled for 1996, in favor of extending his term in office to
December 2000 through a referendum held in April 1995. Then, in 1998
when President Nazarbayev became anxious about his popularity, he sched-
uled the presidential election to take place earlier, in January 1999. An anti-
democratic election law passed to accommodate the timing change ensured
that he would face only token opposition. It is hard to know whether the
Kazakh president’s fears were real or imaginary. Public opinion polls from
late 1997 showed him as still having strong approval ratings.2 At roughly the
same time, though, only about a third of the population was reported to
support his economic policies.3 A year later, a petition circulated calling for
his resignation, which received more than 20,000 signatures. The figure
was an insignificant one in a country of nearly fifteen million, but the insult
it conveyed was not.
Nevertheless, Nursultan Nazarbayev has always been by far Kazakhstan’s
most popular politician. In the first years of independence many saw
Nazarbayev as embodying Kazakh statehood. Initially, conventional wis-
dom held that the country’s stability was due in no small part to his tenure
in office. Even many of Nazarbayev’s most vocal critics would grant that,
save for his presence in high office, Kazakhstan would likely have fallen vic-
Martha Brill Olcott | 27

tim to the same interethnic strife that occurred in so many other parts of the
former Soviet Union.
Speculation on “what might have been” was quite natural in Kazakhstan,
given that conditions there are not wholly dissimilar to those in other post-
Soviet states that experienced interethnic disturbances. Comparisons are
most frequently made with the situation in Moldova, and Nazarbayev always
gets high marks when the relative passivity of Russian secessionists in north-
ern Kazakhstan is compared with the early violence and lingering instabil-
ity caused by Moldova’s breakaway Transdniester Republic. The Russians of
northern Kazakhstan are neither as well organized nor as defiant as those in
the Transdniester region, and they have also received less support from the
Russian political and military establishment.4 Again, accurately or not,
Nazarbayev’s success at home and his prestige abroad are often cited as an
explanation for why Kazakhstan avoided the civil strife experienced in
Moldova in 1991–1992.
In fact, the years just before and after independence afforded Nazarbayev
an opportunity to shine. Nazarbayev was probably the only Soviet party
leader simultaneously to enjoy the strong support of his population, the
respect of his fellow leaders, and the trust of Mikhail Gorbachev. Nazarbayev
was reportedly being groomed for the post of either vice president or prime
minister of the USSR at the time of the failed August 1991 coup. Nazarbayev
was sensitive to the enormous change wrought by the August events and the
potentially fatal weakening of the Gorbachev regime and the USSR itself.5
Many fellow republic presidents turned to him in the coup’s aftermath to try
to broker a power-sharing agreement with the center. When that failed, he
took up the initiative to redefine the CIS to include all the remaining Soviet
republics and not simply Russia, Belarus, and Ukraine.6
A leader is fortunate when his personality and leadership traits are a par-
ticularly good fit for the nature of the society of which he has charge.
Nazarbayev was certainly a man for his times in the last years of Soviet rule
and the first years of independence. It is less apparent how well suited he
is for handling the longer-term problems of Kazakhstan’s transition to inde-
pendence, which may help explain why Nazarbayev has backed away from
an earlier commitment to introduce democratic or quasi-democratic insti-
tutions in Kazakhstan.
Nazarbayev’s career experiences hold clues as to why he has backed away
from his commitment to democracy and may also explain the roots of so
28 | Reluctantly Accepting Independence

many of his other policies in the first years of independence. Nazarbayev
was a Soviet success story. A graduate of a Soviet technical junior college, his
claim to “advanced” education is a correspondence degree from a regional
higher party school.7 Born in the village of Chemolgan in rural Alma Ata
oblast in 1940,8 the Kazakh president moved north for his first job, at the
Karaganda Metallurgical Complex, where after ten years in a blast furnace
production shop he switched to full-time Communist Party work.
Nazarbayev was equally at ease in a Russian-dominated Communist Party
milieu and the rural Kazakh community in which he was raised. He was able
to develop the bureaucratic skills and the patronage necessary to rise to the
top of Kazakhstan’s party oligarchy in near record time. Nazarbayev was
appointed prime minister of Kazakhstan at age forty-four.
Although a strong public proponent of Gorbachev’s economic and polit-
ical reform program, the young prime minister was passed over for appoint-
ment as republic first secretary in December 1986. This was presumably
because of his earlier close association with Kazakh party leader and long-
time Communist Party of the Soviet Union (CPSU) Politburo member Din-
muhammad Kunayev, who was one of the targets of the reformers’
anticorruption campaign in the mid-1980s.9 Despite Nazarbayev’s often
scathing criticism of his former mentor, Gorbachev decided to appoint Gen-
nady Kolbin,10 an ethnic Russian and oblast first secretary from central Rus-
sia to head Kazakhstan’s Communist Party. Angry crowds gathered in
downtown Alma Ata when word of Kolbin’s appointment spread, and
demonstrators clashed with hastily pulled together law enforcement forces,
which consisted in part of local cadets.11
The events of those days must have been personally humiliating for
Nazarbayev, who, in order to protect his own career chances, silently
accepted Kolbin’s appointment and made way for a CPSU central commit-
tee–appointed commission to investigate the disturbances. This committee
eventually found that the instigators of the Alma Ata Uprising, as it came to
be termed, were the children of the Kazakh elite, who were drunk and high
on dope when they took to the streets to protest the curtailing of the
Kunayev era that had so unfairly favored them. Nazarbayev, who finally
succeeded Kolbin in June 1989, allowed this version to stand unchallenged
until shortly before independence, which was declared on the fifth anniver-
sary of the Alma Ata demonstrations.12
Nazarbayev’s first goal in those years was to improve Gorbachev’s opin-
ion of him, and, especially after becoming first secretary, to strike a good
Martha Brill Olcott | 29

deal for Kazakhstan as well. He succeeded quite well at both tasks. From the
time of his appointment as Kazakhstan’s first secretary to Gorbachev’s final
days in office, Nazarbayev was a useful ally to the former Soviet leader.
Nazarbayev worked hard to carve out a reputation for himself in the years
just after coming to power, by first closely studying the situation in Moscow
and then carefully measuring his actions. The question of how economic
authority should be divided between the center and the periphery was an
issue of fiery debate when Nazarbayev was promoted to first secretary in
June 1989. Anxious that Kazakhstan should gain at least a share of its vast
mineral wealth, which was then exclusively under Moscow’s control, the
Kazakh leader became a forceful advocate of a middle position, calling for
“a strong center and strong republics.”13 Effectively this meant that part of
the hard currency revenues from the sale of Kazakhstan’s resources would
be credited directly to the republic’s benefit, although the decisions affect-
ing the development of these resources would still rest almost exclusively
with Moscow. Part of this revenue, in turn, could be used for the develop-
ment of a more diversified industrial economy within Kazakhstan, and the
rest could be used simply to improve the local standard of living.
Moscow was only one focus of the Kazakh party leader’s attention. No
less important to Nazarbayev was strengthening his position within
Kazakhstan and rewarding an elite who would serve him loyally. When
Nazarbayev took control of Kazakhstan’s Communist Party there were still
many who viewed him as a brash and ruthless upstart, someone willing to
forget old obligations if it helped advance his own career. By the time of his
1989 promotion, bloody demonstrations in Kazakhstan and elsewhere had
sensitized the Gorbachev leadership to the need for Communist Party lead-
ers at the republic level to enjoy local support if they were to be effective
supervisors of the economic and political reform process.
The need to gain popular approval has been a challenge ever since, and
one that Nazarbayev has never fully surmounted, largely because he has set
enjoying the perquisites of power as a priority. There have been enormous
changes in the structure of government in Kazakhstan over the past decade,
and President Nazarbayev has changed his personal advisers several times
in an effort to make Kazakhstan’s government a professional one. The pat-
terns of patronage that developed in his first years in office, though, con-
tinue to impede the implementation of economic and political reforms in the
country. Charges of favoritism and corruption increasingly dog the presi-
dency and the presidential entourage. Critics have alleged that the country
30 | Reluctantly Accepting Independence

is developing a tribal or clan system or one based on a family dynasty, while
Nazarbayev’s defenders counter that they are substituting a more “Kazakh”
system in place of the Soviet one that preceded it. Both groups see the prob-
lem of patronage as a feature of transition, but as Nazarbayev’s critics argue,
corruption is now so deeply rooted that the turn to autocracy may prove
irreversible.
Over time President Nazarbayev has grown more sophisticated as a polit-
ical leader as well as seemingly more corrupt. When he took over as the
head of Kazakhstan, public opinion already mattered. This lesson was dri-
ven home by the December 1986 Alma Ata riots and even more so by the
great symbolic role that unrest quickly assumed in Kazakh political life.
Nazarbayev believes that public opinion can and must be managed, but
he has been bedeviled by the question of just how much and when to heed
the public. Still, he understood from the outset that to be a popular leader
he would have to enjoy the strong support of Kazakhs, regardless of their
political persuasion, and to be supported or at least tolerated by the coun-
try’s non-Kazakh population as well. Nazarbayev’s nationalism was initially
the most temperate of any of the post-Soviet leaders, as he sought to define
Kazakh nationalism in a way that was explicitly tolerant of the contributions
of non-Kazakhs, and this in turn provided increased support for his policies
of preserving strong ties among the post-Soviet states.
How sincere a Kazakh nationalist Nazarbayev was in these early years is
hard to say. Even today, he sees the Soviet legacy as complex, although he
is a far more vocal critic of the system that raised him than he was in the first
years of independence. People change over time, and anyone with the
amount of ambition that Nazarbayev had even during the Soviet period
does well not to engage in too much psychological self-examination. Per-
haps Nazarbayev always had a strong and suppressed sense of national
identity, or maybe he simply found it convenient to nurture this identity in
the past decade.

Creating a Place for the Kazakhs in Kazakhstan

His hunger for personal recognition as a great and strong president has also
made Nazarbayev more of a Kazakh nationalist. The pursuit of integration
seemed to make this more feasible as a strategy, for if Russia were placated
on critical economic and security issues, then the Kazakh leader expected
Martha Brill Olcott | 31

to have the flexibility necessary to pursue a domestic agenda more to his lik-
ing. Sensitive to prevailing ethnonational trends, Nazarbayev seems to have
decided that it would somehow be easier to make Kazakhstan a strong
Kazakh state rather than a strong multinational one.
While Nazarbayev’s understanding of how to use the structure of the
Kazakh state to his own advantage evolved steadily, the preeminent role of
the Kazakhs in this state was never to be questioned. President Nazarbayev
has made continual reference to his pride in being a Kazakh, his desire to
honor his ancestors, and the need for those who live in the republic to
respect the traditional Kazakh culture. Although he has often identified
these values as a source of interethnic tolerance, his intent was to empha-
size the special relation of Kazakhs to Kazakhstan. In a speech given in
1994, Nazarbayev stated:

A nation cannot exist without a state, it vanishes. It is not our people’s
fault, but its trouble that it has become a minority in the land of its
ancestors. It is quite appropriate if in some cases the interests of the
indigenous nation, the Kazakhs, are given special emphasis in this
state.14

Despite such statements, Nazarbayev tried, particularly at the outset, to
promote the Kazakh people’s special relation to their nation in a way that
would not antagonize local Russians. In the Soviet era it was somewhat eas-
ier to argue this position since Russians could be urged to learn about and
respect the Kazakhs’ culture in the context of friendship among peoples.15
The mention of special rights for the Kazakhs, however, has always been
highly contentious for the local Russians, even in 1989 when the existence
of the USSR offered Kazakhstan’s Russian population the prospect of inter-
vention by Moscow and the legal protection of Soviet legislation against
encroachment on their linguistic and cultural rights.
Yet Nazarbayev understood that a failure to offer the promise of prefer-
ential treatment to his republic’s titular nationality would risk enraging the
republic’s Kazakhs, who were still smarting over the various indignities that
they had suffered throughout Soviet rule. Although before independence the
Kazakhs were a minority in the republic that bore their name, the only such
community in the former Soviet Union, they wanted to be granted the same
cultural rights that the other principal Soviet nationalities were receiving. As
was true elsewhere in the USSR, informal political groups with nationalist
32 | Reluctantly Accepting Independence

political agendas organized in Kazakhstan to press for legislation that would
make Kazakh the official language of the republic.16 In August 1989 their
wish came true when a bill was passed that mandated a phased program for
increasing Kazakh language instruction in republic schools while gradually
shifting the conduct of local and republic government business into Kazakh.
Regions that were more than 70 percent Kazakh were to shift immediately
to doing business in Kazakh, and all the rest would have up to fifteen years
to complete the transition. Russian groups, especially those in northern
Kazakhstan, objected to the latter provision and to the requirement for pro-
ficiency in Kazakh for high school graduation beginning in 1992.
The language law that Kazakhstan adopted was far less comprehensive
than the legislation passed in many other republics. Its aim was simply to
create a public role for Kazakh that would somewhat reduce, but definitely
not eliminate, the role of Russian. Unlike virtually everywhere else in the
USSR, the two languages were given near parity in Kazakhstan. Elsewhere
in Central Asia, only the Kyrgyz afforded Russian a nearly analogous posi-
tion. In reality, before Kazakhstan’s independence, the enhanced role for
Kazakh was more than cancelled by Russian’s continuing role as the official
language of the USSR. After all, it was not as though the use of Russian were
fated to die out in Kazakhstan, although this might have been the impres-
sion conveyed to the uninitiated by Russian nationalist objections.17 Local
Russian groups claimed that their objections stemmed from a desire to have
their own cultural renaissance. In reality, however, they were campaigning
against providing any role for the Kazakh language in Kazakhstan; they
were against the very idea that Russians should have to learn Kazakh.
The fierceness of the battles over Kazakhstan’s language law left
Nazarbayev and those close to him with little doubt that even serious talk
of independence could destabilize the situation in the republic. While cen-
sorship was eased during those years, opposition political groupings were
able to register in the republic only if they formally disavowed the goal of
independence for Kazakhstan.18 To talk of independence was akin to treason.
Given the enormous undeveloped natural resources of the republic,
Nazarbayev and the Kazakh Communist Party elite felt that even a piece of
the pie would have been a good deal for Kazakhstan. Most other republics
and autonomous regions had far less to gain from the power- and profit-
sharing arrangements proposed by Moscow, and by mid-1990 it was already
apparent that this formulation was no longer sufficient to meet the growing
hunger for autonomy that was gripping those living in the USSR’s regions.19
Martha Brill Olcott | 33

By that time the Baltic republics had reclaimed their independence, there
was mounting public support for independence in Ukraine and Georgia,
and calls for republic sovereignty were commonplace throughout most of
the country.
By contrast, in Kazakhstan there were only vague mutterings about inde-
pendence, and the small nationalist groups, Azat and Alash, focused on the
need for greater cultural and religious autonomy, respectively.20 In part, the
generally cautious Kazakhs had been made more timorous by the savagery
with which Gennady Kolbin had cracked down on anything that could
have been even remotely construed as nationalist protest. Some even went
so far as to refer to 1987–1988 (the Kolbin period) as a “mini 1938,” thus
comparing Kolbin’s policies to those of Stalin during the great purge.21 The
appointment of Nursultan Nazarbayev was thus met with great relief in
Kazakhstan, especially by ethnic Kazakh leaders. Sensitive to the precarious
demographic balance in the republic, even many nationalist Kazakh intel-
lectuals did not want to risk tarnishing Nazarbayev’s reputation for fear that
someone far less sympathetic to the Kazakh cause might be appointed by
Moscow to replace him.
They also understood that Nazarbayev was succeeding in ingratiating
himself with Gorbachev. Peace in the republic allowed Kazakhstan’s leader
to play an increasingly important role in USSR politics. Few in Kazakhstan
yet believed that their republic could become an independent country, and
certainly not one with anything resembling its Soviet republic boundaries.
Every ethnic group wanted to preserve its ancestral lands, and for the
nomadic Kazakhs the fact that few of them still live on their traditional
northern pasturelands has been a long-standing grievance. To risk the com-
plete loss of this territory, which at least still bore their name and the pos-
sibility of future resettlement, was to be avoided at almost any cost.
Separatist talk was becoming common among the Russian population of
northern Kazakhstan, and the new city governments elected in the north-
ern cities in late 1989 included considerable separatist factions. Kazakhs
feared the politicization of the local Russian population. Watching the
nightly news, they were constantly reminded of how secessionist movements
had already led to prolonged armed conflicts between the Azerbaijanis and
Armenians as well as between the Georgians and the Abkhaz.22 It did not
take much imagination to envision the ever more nationalistic Russian pop-
ulation of northern Kazakhstan taking up arms at a time when Moldova’s
Russian population (living in the Transdniester region) was threatening
34 | Reluctantly Accepting Independence

armed secession. If the union did not survive, Kazakhs had good reason to
fear that the territorial integrity of their republic could be threatened as
well.
This helps to explain why Nursultan Nazarbayev, who had assumed the
title of president of Kazakhstan in March 1990, became a stalwart supporter
of rewriting the Treaty of Union, which had bound the Soviet republics
together since 1922. Nazarbayev did not play a key role at the April 1991
Novo-Ogarevo meeting of republic leaders, which arrived at a new power-
sharing formula that gave more power to the country’s constituent units. His
hard work in lobbying for the treaty, though, was a critical factor in mus-
tering support for the agreement in a number of wavering republics.23
The acrimony of trying to get a declaration of sovereignty passed by the
republic legislature in the fall of 1990 had to have spurred Nazarbayev in
his efforts. The legislators who debated the bill had been elected in March
1990 in the first semicompetitive elections held for the republic parliament.
The new parliamentary deputies were almost all people who were on the
party nomenklatura lists,24 but they proved far more fractious than had their
predecessors. The new legislators were beginning to act like parliamentari-
ans, as though the partially democratic electoral procedure that had brought
them to office gave them a popular mandate.
A declaration of sovereignty was passed in October 1990 after a bitter
debate that reflected the prevailing divisions in the republic.25 While the
document unequivocally asserted Kazakhstan’s right to control its own
resources and manage its political affairs, it tried to skirt the question of
whether Kazakhstan was the homeland of the Kazakhs or whether it
belonged equally to all the republic’s various peoples. If it was the land of
the Kazakhs, which the declaration of sovereignty weakly endorsed, then the
Kazakh language and culture deserved a special place in the republic.
Although throughout 1990 it was simply unthinkable to Nazarbayev
that his republic could become independent, by mid-1991 many previ-
ously unthinkable things were already occurring in the Soviet Union.
Mikhail Gorbachev was beginning to act like a spent political force. One sign
of this was his refusal to turn the presidency of the USSR into a popularly
elected office, when Boris Yeltsin was willing to participate in a contested
race for the presidency of Russia. The center of power was shifting from
Moscow to the republics, but Gorbachev seemed unable to work out a com-
promise position that would leave economic reformers and advocates of
republic power satisfied. In response to this, the Kazakh leader began to dis-
Martha Brill Olcott | 35

tance himself somewhat from Gorbachev and to court Russia’s new presi-
dent, Boris Yeltsin.
Nazarbayev became preoccupied with the search for a formula to keep
the union together, which became even more important to him than defend-
ing Kazakhstan’s interests against Moscow. Because of these efforts,
Nazarbayev’s prestige in general increased, not just in Kazakhstan but in the
entire USSR. He became even more visible after the abortive Communist
Party coup of August 1991 led to the scuttling of the new Treaty of Union
on the very eve of its signing. Nazarbayev took the lead in calling for sav-
ing the country when Gorbachev convened USSR legislators in a special ses-
sion held just after he was released from house arrest.26
Gorbachev lacked the legitimacy to rule successfully, while Nazarbayev’s
position within Kazakhstan in particular had been strengthened by the ban-
ning of the Communist Party in the aftermath of the failed coup. This act
led to the transfer of millions of dollars of property from the Communist
Party to Kazakhstan government coffers, including centrally located office
buildings, institutes, hotels, and apartment buildings. The banning of the
party also shifted new responsibilities to the government, giving the Kazakh
president vast sources of patronage for filling the positions he created in the
new government.
By late 1991 a form of secessionist fever had spread from the outlying
republics to Russia. Once reformist and pro-market forces allied with Yeltsin,
there was nothing to hold the old elite coalitions of the center together, and
their dissolution led to that of the USSR itself. Nazarbayev spent much of the
first two weeks of December trying to help Gorbachev broker a loose con-
federative structure to replace that of the USSR, but there simply were few
takers left among the senior republic leaders. Although President Nazarbayev
may have preferred that Kazakhstan remain within a redefined union, the
events of the last half of 1991 had left him in a highly advantageous position
to become the effective leader of an independent Kazakhstan.
Whatever ambivalent personal feelings the presidents of the various
Soviet republics might have had about the divorce from Moscow, by Decem-
ber 1991 political expediency dictated that they each embrace indepen-
dence with enthusiasm. Left with little choice, on December 16, 1991,
Kazakhstan’s leaders declared their country’s independence. It was the final
republic to do so, and Kazakhstan’s parliament voted for independence
eight days after Russia, Belarus, and Ukraine announced their withdrawal
from the USSR.
36 | Reluctantly Accepting Independence

In Search of a Winning Formula for Integration

There was a surreal air about the events of December 1991. The republics’
juridical status had certainly changed, and all the newly independent states
hurried to gain admission to the United Nations, as well as to nearly every
other major international body that would have them. But many found it
hard to believe that independence was real. The leaders of the newly inde-
pendent states had long functioned in a political universe in which Moscow’s
will was law throughout the entire USSR, and its preferences were also gen-
erally viewed as diktat in a group of satellite states just beyond its borders.
For the first months of independence many CIS leaders expected their states
to become little more than clients of Russia, so they poised themselves to
take rapid advantage of the new opportunities that they assumed would
prove fleeting.
In large part because he recognized the elusiveness of this goal,
Nazarbayev’s first priority was to attain some form of reintegration of the for-
mer Soviet republics. This was not simply an exercise in nostalgia on
Nazarbayev’s part, but an effort to solve Kazakhstan’s security dilemma. If
Kazakhstan were still a part of a larger whole, then it would be less impor-
tant to many of Kazakhstan’s citizens just how the new state defined itself.
Integration meant that those who were most disgruntled with Kazakhstan
could still take comfort from their identification with the supranational
entity that Nazarbayev hoped to form.
The urge to integrate was almost instinctive for Kazakhstan’s leaders and
citizens alike, regardless of their ethnic origin. There was little unanimity,
though, on what price should be paid for this integration. Some in
Kazakhstan would even have given up independence if a stable union with
Russia would have resulted. In the early years of independence this was the
position of Kazakhstan’s most famous poet, Olzhas Suleimenov, who turned
political activist in the late 1980s when he organized the vastly popular
Nevada-Semipalatinsk antinuclear movement. Suleimenov, who went on to
form his own political party, the People’s Congress, advocated Kazakhstan’s
acceptance of a confederative status from Russia.27
Suleimenov enjoyed some support for this position, which would have
traded juridical independence for rights of cultural, political, and economic
autonomy over all Kazakhstan’s current territory. President Nazarbayev and
most members of Kazakhstan’s ruling elite obviously did not view this as a
fair trade. They believed that Kazakhstan should remain the equal of all the
Martha Brill Olcott | 37

newly independent states, and they sought a solution in which Kazakhstan
surrendered sovereignty on terms equal to those of other states.
In the first years of independence Nazarbayev thought that some sur-
render of sovereignty was inevitable, but he also felt that Russia’s strategic
advantage over Kazakhstan was maximized in bilateral arrangements. By
contrast, he believed that multilateral settings afforded at least some chance
for the newly independent states to parry Russia collectively to their mutual
benefit.
Thus Nazarbayev dedicated himself to the task of finding a form of supra-
national successor to the Soviet Union that would be acceptable to his fel-
low CIS leaders. Although a strong advocate of Kazakhstan achieving the
maximum profit from its economic resources, President Nazarbayev simul-
taneously tried to convince his fellow CIS leaders that reintegration was in
everyone’s best interest. He did this both within and outside the structure
of the CIS. Nazarbayev was initially an advocate of a strong CIS, and he was
less worried than were many other leaders that the development of multi-
national institutions within the framework of the CIS would be a formula
for Russian domination. On the contrary, given the long border between the
two, Kazakhstan’s leaders believed that the lack of such structures would
likely lead to greater Russian pressure on a bilateral basis.
President Nazarbayev was unsuccessful in getting his CIS colleagues to
accept a strong multilateral organization, as were the Russians themselves.
Initially Kazakhstan’s and Russia’s leaders shared an interest in preserving the
territories of the former USSR as a geopolitical and economic space. Russia
saw this as a means of remaining a great power, while Kazakhstan saw inte-
gration as the way to maximize its influence in the region and the world
more generally.
To be sure, this showed a lack of imagination on Nazarbayev’s part and
a failure to appreciate the possibilities that existed for Kazakhstan as a sov-
ereign state. He eventually moved away from the priority he placed on inte-
gration, a goal that was further handicapped by Russia’s and Kazakhstan’s
contradictory understandings of how this should be advanced. Their dif-
ferences in approach also caused President Nazarbayev to rethink the kind
of integration that would be appropriate for Kazakhstan. It is highly unlikely
that, even if Russia’s and Kazakhstan’s leaders had found a common position,
they could have overcome the objections to a comprehensive and institu-
tion-based integration process that were and are still held by the leaders of
most other post-Soviet successor states.
38 | Reluctantly Accepting Independence

Nazarbayev found the process of trying to achieve integration with Rus-
sia frustrating. His argument was one of mutual advantage, which was
largely undermined by Russia’s access to and use of various security and eco-
nomic pressure points in each of the post-Soviet successor states. Despite
Russia’s periodic use of these pressure points, Moscow never succeeded in
getting the post-Soviet states to join in any sort of effective union, either in
whole or in part. Russia’s first effort, the September 1993 economic union
of nine CIS states, led to the collapse of the ruble zone two months later.
Three states (Azerbaijan, Georgia, and Ukraine) were unwilling to trade
even limited economic autonomy for close economic and security relations
with Russia. This rebuff, and the incompleteness of the union that resulted,
made Russia demand virtually complete economic control over the states
that remained within its direct economic orbit, those still inside the ruble
zone. This was enough to drive all but war-torn Tajikistan out of it.
Russia’s critics saw the CIS as a vehicle for ensuring Russian supremacy
because Soviet successor states were not being asked to “contribute” their
sovereignty on an equal basis. To remedy this, Nazarbayev suggested that
the CIS be replaced by a new organization, a Euro-Asian Union (EAU), in
which member states would adopt common policies at an intergovern-
mental parliamentary assembly and would share a common currency and
common foreign economic policies. EAU decisions were to be based on a
four-fifths majority, with each member state having an equal vote. 28
Nazarbayev wanted legislative ratification by the parliaments of member
states for EAU agreements to have the force of law in order to preserve the
juridical independence of each of the member states.
Such defenses of national sovereignty were not sufficient to mollify the
Kazakh leader’s fellow presidents. When Nazarbayev presented this idea at
the CIS meeting of April 1994, it was met with little enthusiasm. This did
not stop Nazarbayev from pushing forward with the idea, which he had for-
mally introduced as a public document at the United Nations. CIS news-
papers published some two hundred articles in support of the proposal, and
the Kazakhs sponsored conferences in Russia and Almaty where it was
debated. There was never, however, a groundswell of support. For a while
the project enjoyed the endorsement of Kyrgyz leader Askar Akayev and
Georgian President Eduard Shevarnadze, but both eventually backed away
from it when Russia’s leadership strongly disapproved.
Nazarbayev’s proposals found only minimal support from the CIS’s other
presidents, who were less willing to trade sovereignty for security, or at least
Martha Brill Olcott | 39

preferred to do so on the basis of comprehensive bilateral agreements. It
must have been disturbing to the Kazakh leader to learn that he was so out
of step with most of his CIS colleagues, who were willing to abandon Soviet-
style solutions fully. The EAU was predicated on the need to preserve a sin-
gle post-Soviet space, and this in itself was something that the presidents of
many of the newly independent states found objectionable.
States such as Turkmenistan, Uzbekistan, and Moldova did not share
land borders with Russia, and so their leaders felt far freer to imagine a
post-Soviet future in which Russia played an ever-diminishing role.
Azerbaijan had a similar vision, although it did have a small and potentially
contentious border with Russia in Daghestan. The goal of these states was
to make the post-Soviet world only one of the neighborhoods in which
they lived and to develop ever-improving ties with a host of other neigh-
boring states as well as their former Soviet “brothers.” Each sought to do this
in a slightly different way, but the leaders of these states believed that their
flexibility in international affairs would be maximized if they based their
relations with Russia on bilateral agreements. Probably the most painful
defection from Kazakhstan’s point of view was that of Ukraine. The Ukraini-
ans had the Russians breathing down their necks every bit as much as the
Kazakhs did. The prize for Ukraine, however, was membership in Europe,
whereas Europe seemed far away from Kazakhstan, while China, a poten-
tially far more menacing state, was just beyond its borders.
More damning, though, was Russian opposition to the plan. Kremlin
leaders viewed Nazarbayev’s suggestion as contrary to their own national
interests. An EAU predicated on the idea of shared authority between sov-
ereign states was in direct conflict with the Russian strategy of seeking mul-
tilateral frameworks that would institutionalize their own strategic and
economic domination. Russia’s formal response to Nazarbayev’s plan came
at the October 1994 CIS meeting, when its delegates tried to usurp and
redefine his plan to make it supportive of strengthening the CIS rather than
replacing it. At that time member states agreed to a six-point program that
called for the closer integration of economic, political, and security relations
within the CIS’s own institutional arrangements. It provided no mecha-
nisms for this to be achieved, however, and so they effectively made impos-
sible the goals that they were formally supporting.
Since that time, there could be little doubt that Nazarbayev’s proposals
for the creation of an EAU were dead, although the Kazakh leader has con-
tinued to claim that such a union would be preferable to the CIS.29 Partly,
40 | Reluctantly Accepting Independence

Nazarbayev’s timing had been unfortunate. The recent political rebirth of the
Communist Party of Russia brought with it talk of the re-creation of a Soviet
Union, which was extremely unsettling from the perspective of the leaders
of the newly independent states. This tainted any talk of a new union, and
there was no way that Nazarbayev wanted his union confused with a com-
munist-inspired restoration of a Moscow-style diktat, in which any sover-
eignty that continued to exist would be purely symbolic.
The rise of the Communists also corresponded to a change in Russian
government thinking about the policies that should be pursued toward the
“near abroad,” as the Soviet successor states were then collectively termed.
In late 1994, the liberal-minded foreign minister, Andrei Kozyrev, pressed
these states to define their strategic interests synonymously with those of
Russia.30 Throughout 1995 this trend in Russia’s policies became ever more
apparent, with Moscow claiming residual ownership rights in a number of
key strategic resources, including energy. This affected all the Caspian Sea
states, including Kazakhstan.
Kozyrev’s policy became an increasingly dominant theme in bilateral
relations between Russia and Kazakhstan, and in Russia’s relations with
other CIS states. By mid-1995 Russia was pushing hard for an expanded role
within the CIS, and Russia’s first choice was to use the CIS as an instrument
for its coordination of the military and economic policies of the member
states. Russia’s security goals were now clear: international borders (those
not with CIS states) were to be secured at least in part by Russian troops;
conflicts within the CIS were to be negotiated by Russian-dominated multi-
national forces that were recognized (and if possible funded) by the United
Nations; and Russian troops were to be based throughout the CIS. Russia,
however, had real difficulty in achieving these objectives.
The Russian government continued to strive for a similar level of eco-
nomic integration. To this end, it pushed for the establishment of the CIS’s
Interstate Economic Council (in 1994), which was supplanted in 1995 by
the Customs Union. The special conditions on membership laid out by sev-
eral states, particularly Ukraine, doomed this organization to little more
than a paper existence from its very inception.
From this point, relations within the CIS developed in a two-tier system.
When the economic union initiative faltered, the Russian government
pushed for a four-nation deep integration treaty between Russia, Belarus,
Kazakhstan, and Kyrgyzstan. Tajikistan later signed on as well. The treaty
called for the development of a full economic union between those states,
Martha Brill Olcott | 41

including the introduction of a single currency by the end of 1997, as well
as the coordination of plans to develop natural resources and other critical
sectors of the economy through the use of multinational corporations
formed from union members wherever possible. The legal and educational
establishments of member states were to strive toward full coordination as
well, and the treaty mandated the development of an interstate legislative
oversight council to supervise the entire process. The latter was established
almost immediately, but it never succeeded in regularizing either trade rela-
tions or other economic policies.31
At the same time a group of states tried to back away from the CIS and
formed a new multilateral organization, GUAM, to help them do so.32 The
leaders of Georgia, Ukraine, Azerbaijan, and Moldova began discussions
on establishing a cooperative economic and security organization in late
1996 and formalized their plans at the October 1997 Organization for Secu-
rity and Cooperation in Europe (OSCE) summit. Uzbekistan formally joined
them in April 1999 during the NATO celebrations in Washington, and
GUAM became GUUAM.33 That organization began to recede in impor-
tance, however, after the election of Vladimir Voronin, a Russian communist,
as the president of Moldova on April 4, 2001. Voronin’s election coincided
with Uzbekistan’s reevaluation of its security needs and Tashkent’s growing
interest in improved bilateral relations with Russia. By this time, pressure on
Kazakhstan to join GUUAM had almost fully abated.
Despite these developments, Russian leaders tried with some regularity
to reinvigorate the CIS, although Boris Yeltsin’s ill health did little to advance
this cause. He insisted on presiding over the organization, even though his
capacity for work was ever diminishing. A meeting of the heads of state, first
scheduled for January 1998, was postponed several times before it was
finally held on April 29 of that year in Moscow. In an effort to give greater
credibility to the ailing Russian leader, it was agreed at that time that Yeltsin
would remain chairman of the council until 2000.
The April 1998 summit appointed Russian businessman Boris
Berezovsky as the executive secretary of the CIS. Believing that he possessed
the charm and skills necessary to save the organization and make it more
businesslike, Berezovsky launched an ambitious program of travel and con-
sultation with CIS leaders, trying to find ways to better define and make
mutually acceptable the CIS functions. For a while it looked as though the
appointment of the energetic Berezovsky would serve to reenergize the flail-
ing organization, at least as a forum in which the leaders of the post-Soviet
42 | Reluctantly Accepting Independence

states could meet and discuss common problems. Berezovsky’s proposed
changes, however, encountered broad resistance. In particular, the presi-
dents of Turkmenistan and Uzbekistan opposed restructuring because they
had no wish to strengthen the CIS administration. The CIS staff opposed the
proposed personnel reductions and also objected to Berezovsky’s market
approach to economics. Others objected to Berezovsky’s proposal that the
representatives be seated hierarchically at summit meetings according to
their country’s contributions to the organization.34
After Vladimir Putin came to power in December 1999, yet another effort
was made to reinvigorate the CIS. Nazarbayev worked with Putin to advance
the case of integration, supporting the Russian president’s efforts to launch
the Euro-Asian Economic Community, a transformed and upgraded version
of the Customs Union. The leaders of Belarus, Kazakhstan, Kyrgyzstan,
Russia, and Tajikistan signed the documents endorsing this in Astana in
October 2000. Putin actively sought closer ties with the former Soviet states
of Central Asia, promoting military and technical cooperation under the aus-
pices of the CIS Collective Security Treaty and the establishment of a
regional antiterrorist center. By this time, though, Nazarbayev was much
more confident about his ability to manage a bilateral relationship with
Russia, although he nonetheless was quick to offer support for the new
Russian president’s efforts, noting that Kazakhstan pursued a policy of inte-
gration with all CIS countries and “especially with the Russian Federation.”35

Seeking Accommodation with Russia

As already noted, initially Nazarbayev and Kazakhstan’s senior leadership did
not seem to be particularly troubled by Moscow’s lingering control. Even a
largely titular form of independence created enormous new opportunities for
them. Nazarbayev, as well as others in positions of prominence, moved
quickly to position trusted friends and family members in posts that managed
the country’s foreign economic relations so that state assets might become
personal ones in case independence proved short-lived.36 If independence
was sustained, then Kazakhstan’s wealth would come under the more per-
manent control of the local elite since they supervised the economic reform
process that would transform state holdings into privately owned property.
Independence was also a great psychological victory for the republic’s
Kazakh population, which had long felt victimized by Russia’s colonial poli-
Martha Brill Olcott | 43

cies and by Soviet nationality policy. Many of the Kazakhs’ grievances were
generations old, but the revelations that came out with glasnost, combined
with the new political freedoms of perestroika, allowed these feelings of per-
sonal anger to begin to be expressed collectively. Although excited by its
prospects, few of the Kazakhs had anticipated independence, and there was
a general nervousness that the breakup of the USSR would somehow lead
to disastrous consequences. In fact, an August 1992 survey supported by the
U.S. Information Agency (USIA) found that 61 percent of the population of
Kazakhstan believed that “it was a great misfortune that the Soviet Union no
longer exists.”37
Fate’s victims for so much of their history, many Kazakhs were now ter-
rified that independence would be their final undoing, that the new coun-
try’s Russian population would try forcibly to split northern Kazakhstan
from the rest of the country. The culture and tradition of the Kazakhs
revolved around the control of their former grazing lands and the burial
places of their forefathers. They recognized, as well, that many of Kazakhstan’s
Russians viewed the region in symbolic terms, seeing this to be Russia’s fron-
tier and their homeland, over which they were now losing control.
Involuntarily stripped of their Soviet citizenship, even local Russians
with newer ties to the region viewed Kazakhstan’s independence as an
unpleasant surprise, but most were too stunned to know how to react. Their
response was generally one of silent displeasure, especially because Russia’s
leaders were too preoccupied with their country’s rebirth and newly changed
status to offer much concrete defense of their “stranded co-nationals,” other
than to discourage them from attempting to move back to Russia proper.
Although President Nazarbayev understood that he had to maintain the
support of the ethnic Kazakhs, he was also aware that Kazakhstan’s security
depended upon the continued quiescence of the country’s large Russian
population, as well as the more formal support of Kazakhstan’s indepen-
dence by Russia’s leaders. The economy of northern Kazakhstan was fully
interlinked with that of the neighboring Russian oblasts. Ending these links
could mean economic hardships for the Russian-dominated parts of the
republic and a worsening economic situation in the country more generally.
This put Russia in an extremely advantageous position for extracting strate-
gic and economic concessions from Kazakhstan. All Russia had to do was
to issue veiled threats about what the improper treatment of Kazakhstan’s
Russian population might provoke, and the Kazakh leadership immediately
became more malleable. This did not mean that Nazarbayev and his
44 | Reluctantly Accepting Independence

colleagues knuckled under to all Russia’s demands, but the country’s lead-
ership was never allowed to escape its feeling of vulnerability.
The Kazakh president was quick to demonstrate that he was willing to
“cut a good deal” with Russia and that Kazakhstan was content to remain
within the protection of Russia’s nuclear shield. He also rapidly reaffirmed
that Kazakhstan had no interest in remaining a nuclear state and started to
negotiate the dismantling of Kazakhstan’s nuclear arsenal almost immedi-
ately after receiving independence. Certainly this won Kazakhstan many
new friends in the West, especially in the United States, as the Americans
were allowed to help Kazakhstan denuclearize.38 The decision was also well
received in Russia and in Kazakhstan. In addition to having more than thir-
teen hundred nuclear warheads on its soil, the former Soviet republic had
been a major nuclear test site and was still reeling from glasnost-era revela-
tions about the scale of the ecological damage done in the republic.
Over time, Kazakhstan’s decision to give up its nuclear weapons provided
a framework for the resolution of its security needs more generally. It brought
the United States in early as an important foreign actor in the country, while
Russia was generally able to count on Kazakhstan’s friendship. Kazakhstan
was a signatory to the CIS Collective Security Treaty in 1992 and renewed its
membership in 1999, although by then Kazakhstan was participating actively
in NATO-sponsored activities. Even more important though is the bilateral
relationship with Russia. The foundation for Russian-Kazakhstan military
cooperation is the 1992 treaty, On Friendship, Cooperation and Mutual
Assistance, which provides the building blocks for close cooperation between
the defense establishments of the two countries. Russia pledged to help the
Kazakhs build their own military forces. In September 1994 Russia was
granted the right to maintain military bases on Kazakhstan’s soil and to move
troops and military equipment across Kazakhstan’s territory. In 1995 Russia
was granted a role in the protection of Kazakhstan’s border with China,
which later reverted to exclusive Kazakh control.39
In the mid-1990s Kazakhstan began to distance itself somewhat from
Russia, although in July 1998 the two countries signed a comprehensive
security agreement, each agreeing to provide all necessary assistance, includ-
ing military assistance, in the event of an attack on the other country, and
in 2000 Kazakhstan once again agreed on close military cooperation with
Russia.40
The Kazakhstan-Russian security relationship, however, has not been
without problems. The most serious of the disagreements between the two
Martha Brill Olcott | 45

countries was over the fate of Baikonur, the Soviet space center near the
Kazakh city of Leninsk. In 1994, after two years of sometimes very acrimo-
nious negotiations, the Kazakhs gave the Russians virtually complete juris-
dictional rights to the city and space center for a mere $115 million a year,
a sum that the Russians later applied against Kazakhstan’s debts. Russia also
retained the rights to the Balkhash missile attack early-warning center and
the Sary Arka and Emba weapon test sites. The latter is slated to be under
Russian control until 2005. Minimal numbers of Russian troops remain to
staff Baikonur, Balkhash, the two weapon test sites, and the Russian border
guard mission in Almaty.
The status of the Baikonur space center has regularly created difficulties
in the Kazakh-Russian relationship, and the Russians have been loath to pay
even the nominal rent that was eventually agreed upon, citing Kazakh’s
nonpayment of its interstate debt. Finally, in January 2000, a set of com-
prehensive agreements was reached between the new governments of Prime
Minister Kasymzhomart Tokayev and the Russian acting president, Vladimir
Putin, in which Russia transferred military aircraft and technology to the
Kazakhs.41 Almost simultaneously the Kazakhs turned over half ownership
of the state electric company to the Russian United Electrical Systems to
meet the state’s debt to Russia. While negotiations seem to have favored Rus-
sia, with time the Kazakhs have grown somewhat more confident in the rela-
tionship. In October 1999 they even banned Russian launches from the
space center for a four-month period after two explosions led to civilian
casualties.
Kazakhstan’s security relationship with Russia is further complicated by
the former’s active participation in the U.S.-sponsored NATO Partnership for
Peace. Kazakhstan has allowed U.S. technical experts to play a leading role
in the dismantling of its nuclear weapon systems and in the conversion of
its defense establishment more generally. This has sometimes displeased
Moscow, such as during an unscheduled 1994 U.S. airlift of weapon-grade
uranium from Kazakhstan.42 Kazakhstan was also a member of the NATO-
sponsored CENTRASBAT,43 which consisted of troops from Uzbekistan,
Kazakhstan, and Kyrgyzstan that received training from U.S. military experts
in the management of ethnic conflict. By the late 1990s U.S.-Kazakh bilat-
eral relations, while having generally gone forth under the NATO umbrella,
superseded CENTRASBAT in importance. These U.S. and other NATO
efforts do not presuppose a Russian withdrawal from Kazakhstan, but they
have led to U.S. troops engaging in exercises on Kazakhstan’s soil.
46 | Reluctantly Accepting Independence

Nevertheless, Russia remains Kazakhstan’s dominant security partner. In
March 2000 the Kazakh president signed an accord with Russia and
Kyrgyzstan to organize a joint air defense system to advance the develop-
ment of a joint air defense system for the CIS. As part of this agreement, Rus-
sia supplies Kazakhstan with fighter jets and missile defense systems, in
addition to millions of dollars in arms that Russia exports to Kazakhstan
yearly.44 As Nazarbayev stated eight months later, “I never tire of repeating
that Russia is Kazakhstan’s closest ally, because this is the way the fate of our
peoples has taken shape. This is the way geography and history ordered it.”45
But relations between the two states are complicated, and economic rela-
tions are even more so than security ones. Russian officials have always felt
that Moscow was entitled to residual rights in Kazakhstan, while the
Kazakhs are more and more uncomfortable with granting the Russians spe-
cial privileges. Initially the economies of Russia and Kazakhstan remained
fully intertwined. As late as 1994, the first year for which such statistics were
reported, 59.4 percent of Kazakhstan’s exports went to Russia, and 46.7 per-
cent of Kazakhstan’s imports came from Russia.46 The interdependence of
the two economies was probably even greater in the preceding years. Rus-
sia was dependent upon Kazakhstan for raw materials—initially 100 percent
of Kazakhstan’s aluminum, iron ore, and chrome were sent to Russia—and
Kazakhstan received just about all its industrial machinery and heavy equip-
ment from Russia. In 1992 it was unthinkable to planners in both countries
that one could make the transition to a market economy without account-
ing for the needs of the other. To do otherwise would be to risk disaster.
Of course, it was always Kazakhstan’s economy that was at the greater risk
in the relationship since in its search for new and better partners it was still
generally obliged to ship its goods across Russia.
Consequently, the Nazarbayev government decided that to ensure in par-
ticular the continued operation of its industries, Kazakhstan was prepared
to absorb the shocks of Russian economic policy by remaining within the
ruble zone. This marriage of economies of the two newly independent states
was an unhappy one from the outset. Russia blamed part of its skyrocket-
ing inflation on neighboring states that expected the delivery of rubles but
that would not free prices at the same speed as Russia. For their part, Kazakh
leaders complained of unfair trade policies that cut off deliveries to Kazakh
enterprises as a punishment for the nonpayment of government debts that
were still being negotiated by the two states. Kazakhstan eventually left the
ruble zone in November 1993, when the price of membership became the
Martha Brill Olcott | 47

transfer of the nation’s gold reserves to Moscow. As I discuss in chapter 5,
this decision led to a major reorientation of Kazakhstan’s economic strategy.
Kazakhstan was particularly vulnerable in the energy sector, where Rus-
sia has most vigorously claimed equity rights because of prior Soviet invest-
ments. Kazakhstan’s refineries were not linked by the USSR pipeline system
to its principal deposits, nor did the refineries possess the technical capac-
ity to process most of the country’s oil. So, although an oil- and gas-rich
state, Kazakhstan imported 28,299,700 tons of energy from the former
Soviet Union in 1993, the majority of which came from Russia.47
In addition, Kazakhstan’s hydroelectric plants serviced Russian industries
to the north instead of Kazakh cities to the west or south. Western invest-
ment in the energy sector would ease this dependence, but plans for pipeline
construction left Kazakhstan sandwiched between the Russian interest in
profiting from fossil-fuel transit fees and U.S. desires to isolate Iran, the
cheapest alternative route.
Meanwhile, the Kazakh leadership remained sensitive to the fact that
demography had left the country with a potential time bomb. They feared
that the large Russian population would well prove to have a shorter fuse
than the Kazakh population, but no one wanted economic collapse to pro-
ceed to the point where the fuse of either group would be tested. Improved
economic ties with Russia seemed the best way to ensure that this would not
happen. Sovereignty might be compromised for stability, but Nazarbayev
was unwilling to trade the territorial integrity of his country or accept vas-
sal status with Russia as the price. He tried to shape economic and political
reforms in ways that would make Kazakhstan the kind of state that would
appeal to both Kazakhs and local Russians. To do this successfully required
careful politicking at home and lobbying in Russia. With time, Nazarbayev’s
endorsements became little more than seemingly insignificant words.
Kazakh perceptions of dependency on Russia have been steadily chang-
ing since the mid-1990s. Once Nazarbayev understood that integration was
not likely to be forthcoming and began to fear Russia less, he sought a more
independent international stance for Kazakhstan and modified his country’s
policies to reflect a greater receptiveness to international advice. Kazakhstan’s
economic planners have taken close direction from World Bank and Inter-
national Monetary Fund (IMF) consultants, but as they were reminded again
after Russia’s August 1998 financial crisis, for the next decade or two (at
least), Kazakhstan’s economic reform cannot occur along a wholly separate
track from that of Russia’s. How relations should be worked out between the
48 | Reluctantly Accepting Independence

two states has been the subject of continual negotiations, but virtually every-
one involved in Kazakhstan’s economy feels strongly that there cannot be per-
manent trade barriers between these two states.
The Kazakhs now believe, however, that they have to decide on the coun-
try’s economic priorities without Russian guidance. It took time for
Kazakhstan’s economic reformers to understand that they could withstand
Russia’s economic blockades and shortages. Mass unemployment among
Kazakhstan’s Russian population also became a somewhat diminishing
strategic risk, especially as large numbers of Russians, the majority from the
industrial work force, began to leave the country. Most important, the Rus-
sians too began to cut themselves off from the Kazakhs. It became easier to
defend the cause of macroeconomic reform despite its near-term hardships
because Russia’s three-thousand-mile border with Kazakhstan began to be
delineated and secured by Russian troops.
By the late 1990s, Russia became firm in its resolve to establish a delin-
eated border with Kazakhstan and to strengthen border controls, claiming
the need to control the illegal passage of goods across its border caused by
poor security. In time, the Kazakh elite came to appreciate that they had ini-
tially overestimated the nature of the threat that Russia posed to
Kazakhstan’s security and the extent to which Russia was prepared to risk
its international position to prevail in the Kazakh republic. Even at its most
acquiescent, the government of Kazakhstan did not roll over and play dead
on command. Although the Kazakhs rarely just acceded to Russian
demands, they have generally tried to make agreements that Russia found
controversial quietly rather than bickering openly. This strategy has been
characteristic of Kazakhstan’s relations with large Western foreign investors
as well.
Kazakh leaders have also begun to put more emphasis on cooperating
with their Central Asian neighbors. Kazakhstan, Uzbekistan, and
Kyrgyzstan agreed to make a Central Asian common economic space in
January 1994. The Central Asian Economic Community did not include
Russia but grew larger with the addition of Tajikistan in 1998. The Kazakh
leaders would like to see this ineffectual union become stronger, and they
believe that their country’s interests would also be well served if the two
other Caspian successor states, Azerbaijan and Turkmenistan, would join.
This union was designed in part to counter Russia’s influence, but it also
exists to compensate for Russia’s partial withdrawal. Russia has observer
status in this organization.
Martha Brill Olcott | 49

Although cooperation within Central Asia is a necessary condition for
regional stability, it cannot guarantee Kazakhstan’s survival. This means that
Kazakhstan will always have to have an eye on Russia’s potential response.
It is likely that Kazakhstan has declined to join GUUAM for this reason;
GUUAM was explicitly designed to limit Russia’s involvement in the strate-
gic affairs of the member states. Nevertheless, Kazakhstan’s understanding
of its independence has changed dramatically in a few short years. Initially
it did not believe that it had any rights as a state at all, but now it is pursu-
ing an assertive state-building policy.
With time, Nazarbayev has come to understand Kazakhstan’s potential as
a country, although it is possible that he now overstates it. The Kazakh
leader is said never to have traveled abroad before 1990. Given this, it is not
hard to understand the hesitancy that he showed about Kazakhstan’s “going
it alone” as the USSR was collapsing. As he became more at ease with trav-
eling the world, Nazarbayev’s appraisal of his nation’s potential role changed
as well. In his mind at least, Kazakhstan is the jewel of the region, the
wealthiest and most physically attractive of all the region’s states.
Nazarbayev has never liked playing second fiddle to anyone and has bri-
dled when unfavorable comparisons have been made between his state and
any of its neighbors, or between the quality of his leadership and that of
other post-Soviet leaders. He is confident that he can be a well-respected fig-
ure globally and believes himself more than the diplomatic equal of the
inexperienced Vladimir Putin, an advantage he did not believe he enjoyed
with Boris Yeltsin.
Nazarbayev is less enamored of trading sovereignty for security than he
was a decade ago, but even now Kazakhstan’s leader is willing to accept a
greater trade-off of autonomy and security than are the leaders of most of
the other newly independent states. While other states were content to let
the CIS wither, Kazakhstan’s policy makers had a very different under-
standing of the relation between economic and security needs. The Kazakh
leaders believe that geography puts them at risk, and a strong Russian pres-
ident could increase this sense of vulnerability. As long as Vladimir Putin
continues to emphasize the need for Russia to assert its strategic interests in
neighboring states,48 President Nazarbayev will continue to emphasize the
need for accommodation in his dealings with his northern neighbor. Still,
accommodation is not synonymous with domination.
While publicly demanding an equal partnership with Russia, however,
Kazakhstan’s leader would be content with a well-structured relationship in
50 | Reluctantly Accepting Independence

which his country was Russia’s junior partner. Kazakhstan has tried hard to
nullify some of Russia’s lopsided influence in the country, actively pursuing
a highly diverse foreign policy strategy, which includes close ties with such
disparate states as the United States and China. Nazarbayev seems well
aware that such strategic partnerships exist at the behest of the stronger state
rather than the weaker.
As the Kazakhs look less and less frequently to Russia, they are in fact
becoming something of the junior partner that they want to be. Yet while
publicly Kazakhstan’s leaders often vigorously defend the right of
Kazakhstan as a sovereign nation to define its own national interests, pri-
vately they admit that such calculations are generally made with an eye to
Russia’s likely response. What is most troublesome to the Kazakhs is not that
they must occasionally cede to the Russian will, but that the Russians will
almost never cede to Kazakh preferences.
3

The Challenge of Creating Kazakhstanis

ach of the Soviet successor states has struggled to define just who exactly
Etentious.
are “the people,” but in Kazakhstan such efforts were especially con-
The country’s leaders proudly boast that Kazakhstan is the most
multinational of all the Soviet successor states, but few who live in the
country seem proud of this ethnic diversity. Instead, it appears a source of
stress for many. Outside observers sense that for Kazakhstan to survive and
prosper, its population must develop a civic-based patriotism to a common
homeland rather than an ethnic-based loyalty to the land of the Kazakhs (or,
alternatively, of the Russians). This seems more difficult for the country’s
Kazakh-dominated leadership to understand than for its outsider advisers.
At the time of statehood, the country’s two principal peoples, the Rus-
sians and the Kazakhs, each looked at the world in different ways, leaving
the government with the challenge of bridging these differences. The gov-
ernment also sought to accommodate the worldviews of other ethnic
minorities, so that all these diverse peoples would share common political
goals. Kazakhstan’s government has managed to keep the peace but has not
given real meaning to the country’s ethnic diversity. While claiming to speak
for all, it has favored the interests of ethnic Kazakhs over the country’s other
ethnic communities. At the same time, as the country has become less
democratic, President Nazarbayev and the ruling coterie have given every-
one less voice in establishing the political norms and institutions that gov-
ern political life.
In a more democratic setting, feelings of personal political empower-
ment might have led to a diminished importance of ethnic differences, and
51
52 | The Challenge of Creating Kazakhstanis

so created more opportunities for ethnic accommodation. Even under such
conditions, ethnicity would likely have continued to play an important role
in influencing preferences for how the state should function. Yet
Kazakhstan’s rulers have tried to shape the nature of the Kazakh state with
little popular involvement, preferring to imagine what it is that the people
think and feel, rather than consult them.
Although the same elite has dominated the country for more than a
decade, its understanding of how to balance the interests of Kazakhstan’s
two principal ethnic communities has changed. While continuing to
embrace the rhetoric of ethnic tolerance that stresses the multinational
nature of the state, the government now actively pursues policies that
strengthen the Kazakhs’ claim to cultural, political, and economic hege-
mony. These policies are geared to a future in which the Kazakhs will be a
large enough majority to dominate the country.
President Nazarbayev and his close associates initially expected that the
change in demographic balance would be gradual. The expectation was
that the higher natural growth rate of the Kazakhs would be augmented by
some in-migration of Kazakhs living elsewhere and an outmigration of those
Russians who could not accommodate themselves to the changed political
circumstances of the republic. Although the government sponsored the in-
migration of Kazakhs, it also encouraged Russians to see a future for them-
selves in Kazakhstan and regularly reaffirmed this goal. One can only
speculate on what factors motivated the Kazakh leadership, because few of
these policies were well articulated. Certainly there was a fear that the Rus-
sians, living in ethnically consolidated enclaves, would opt for secession
rather than outmigration. There was also a concern that Russia would not
tolerate the outmigration of millions of Russians. In fact, when Russians ini-
tially began to leave the country, the Kazakh leadership went to great lengths
to deny that they were leaving.
The demographic change has been a rapid one, caused largely by the
departure of nearly one in four Russians. In addition, the population of
Kazakhstan has been atypically mobile in the past decade, and the popula-
tion makeup has been changing at the local and the national level. As local
Russians started leaving Kazakhstan in increasing numbers, the Kazakh
government began to rethink its strategy. Although Kazakhstan’s govern-
ment never targeted the Russians, most seem to have viewed their departure
as a good thing, and slowly the policies of the government changed to make
the most of their departure.
Martha Brill Olcott | 53

Over time Kazakhstan has become a more conspicuously Kazakh state,
both in its composition and in its ideology. The Russian language remains
in wide use, its legal status being only slowly eroded, more for practical rea-
sons than for ideological ones. The state cannot afford to lose its educated
and technologically skilled population, which still functions almost exclu-
sively in Russian, regardless of ethnic origin. The Kazakhstan government’s
long-range plans call for English to become the international language of the
next generation, and English language instruction was mandated for all
schools by the end of 2000. But languages are not introduced by legislation
as much as by large expenditures on education, which to date have by and
large been lacking in Kazakhstan. Kazakh nationalists, however, are con-
stantly pressuring the government to restrict the role that those not fluent
in Kazakh can play in public life.
The weak showing of Kazakhstan’s nationalist parties at the polls is not
an accurate indicator of the public support of the nationalists’ agenda.1 It is
more a product of the political system’s favoritism toward progovernment
parties and factions, and to some extent a measure of the popular distrust
of the administrative capabilities of the Kazakh nationalist leaders. In fact,
parts of the Kazakh nationalist agenda are viewed sympathetically by many
Kazakhs, including those of the ruling elite, and most Kazakhs resist the idea
that all ethnic communities have equal claims to political empowerment in
multi-ethnic Kazakhstan. Kazakhstan is their homeland, even though there
is considerable variation among the Kazakh population as to what this
means precisely. The Kazakhs agree that they suffered at Russian hands for
more than two centuries and that the reestablishment of the Kazakh state
must compensate for that.
Given the deep-seated differences in political values between the coun-
try’s two principal nationalities, it is a testament to the population’s apathy
that the country’s social and political atmosphere has been so calm. The
strategy that the government is pursuing remains potentially dangerous. By
reducing the scope of individual political action and emphasizing the cul-
tural and spiritual needs of the Kazakhs, the government is trying to prevent
an economically and socially disaffected population from mobilizing across
ethnic lines. It is also assuming that it can keep the population from mobi-
lizing along ethnic ones. While the risk of ethnic discord seems in no way
imminent, for all the talk of foreign threats, the greatest source of instabil-
ity for Kazakhstan lies within the state itself.
54 | The Challenge of Creating Kazakhstanis

Nationalism and Ethnic Identity in Kazakhstan

Ethnic differences that were latent in the Soviet era became suddenly appar-
ent with the collapse of communist ideology. The Soviet system required
that individuals preserve their nationality, the term used to denote ethnic
identity, which was indicated on line five of the passport that each adult was
obliged to carry and on most other official documents. Simultaneously,
though, the totalitarian structure of the system demanded allegiance to the
artificial sociopolitical construct of the Soviet Union rather than to an eth-
nic or territorial nation. Those for whom loyalty to the ethnonational com-
munity overshadowed their feelings for the Soviet fatherland risked
repression by a state that searched determinedly for enemies.
The infrastructure of terror—the remains of the old Stalinist security sys-
tem—decayed along with the ideology of communism, which allowed peo-
ple more freedom to define their own loyalties. Many leaders felt that
elevating national identity from an indicator of ethnicity to an ideological
bond would facilitate the creation of new state allegiances. After all, nation-
alist aspirations for independence had played a critical role in undermining
the stability of the economically and ideologically bankrupt USSR. Even in
Kazakhstan, where until independence the ethnic Kazakhs were a minority,
the ruling elite still viewed them as the only community inherently loyal and
patriotic. Citizenship, however, was awarded to all permanent residents,
creating two de facto classes of citizens from the outset.
Soviet political and economic practices left all the new states with sizable
populations that were living outside what local politicians began to term
peoples’ historic homelands. Communist planners dispatched more people to
some parts of the USSR than to others so that several of the new countries
(Armenia, Uzbekistan, and Turkmenistan) were close enough to being
mononational to make the emphasis on ethnic identity a potentially attrac-
tive foundation for national unity.
The emergence of nationalism as the basis of state ideology in most of the
neighboring states intensified the problem of identity formation for
Kazakhstan, whose boundaries are more than many others a product of
administrative choices made during the Soviet period.2 Kazakhstan was
deliberately developed as a showcase of Soviet economic and social theories,
and Kazakhstan’s demographic situation was a product of those policies.
Although Kazakh nationalists may be convinced that the metropolis’s pri-
mary goal was to overwhelm them numerically, Moscow was motivated by
Martha Brill Olcott | 55

more complex incentives, both economic and ideological. In fact, in various
periods (especially in the 1920s and 1930s), the population sent to
Kazakhstan was the object of punishment, as opposed to being a punish-
ment for those among whom they were sent to live. It is fair to say, however,
that the Russian and Soviet policy makers were not overly troubled by the dis-
locations suffered by the Kazakhs as a result of various resettlement policies.
In some other kind of state, a new form of civic pride or geographically
based loyalty might have developed to unify all who lived in the Soviet
republic of Kazakhstan. However, the omnipresent ideology of the Soviet
Union rigidly fixed a person’s ethnic identity while propagating and reward-
ing internationalism. As a result, people with strong ethnic loyalties from all
the country’s ethnic communities, including the Russians, always felt dis-
criminated against during the Soviet era. Nationality was a given, but nation-
alism, believing that your ethnic community was somehow superior to all
others, was a crime for which you could be jailed and, under Stalin, even
executed. Such conditions served to leave people hypersensitized to the
importance of advancing the cause of their ethnic communities, and this
hypersensitivity has locked the people of Kazakhstan in a kind of political
zero-sum game in which the advances of one ethnic group are understood
as losses by the other.
Kazakhstan’s leaders have been aware of their republic’s riven nature
since at least the mid-1970s and have made repeated efforts to elaborate
policies and propaganda systems to incorporate the identities of both Rus-
sians and Kazakhs. Some progress was made during the Brezhnev era when
longtime republic party boss, Dinmuhammad Kunayev, succeeded in cre-
ating a certain loyalty to the concept that one could be a Kazakhstanets
(“Kazakhstaner”), or a person from Kazakhstan. This term had no ethnic
connotation and was used to encourage pride in the republic as an impor-
tant region of the Soviet Union, a distinctive and multi-ethnic part of the
whole that was making vital contributions to the entirety of the USSR.
As the USSR weakened, however, and as the republic elites began to
fight for greater control of the resources on their own territory, nationalism
became a critical part of the vocabulary that justified this move toward sov-
ereignty. Moscow, it was frequently charged, was preventing the local eth-
nic community from exercising its historic claim to a territory. For such a
strategy to be successful, it had to be embraced by the head of a republic’s
Communist Party, and those who opted not to push for such a strategy
risked ouster by an angry population.
56 | The Challenge of Creating Kazakhstanis

This made the calculus of decision making difficult for Nursultan
Nazarbayev. He was aware of the economic costs of continuing to cede the
control of the wealth of his republic to Moscow, but he was equally con-
scious of the risks associated with advancing ethnonational claims to nation-
hood in Kazakhstan. As I have detailed, northern Kazakhstan in particular
is a region with two antithetical histories: the Kazakhs believe that they
were pushed from this land by advancing Russians, while the Russians con-
sider it the edge of Russia’s historical frontier, an “empty” land that their
ancestors came to farm. The Russian claim to the northern oblasts was artic-
ulated with particular eloquence in 1990 by Alexander Solzhenitsyn in his
widely distributed “How Are We to Rebuild Russia?”3
For all but a small minority of Kazakhstan’s Russians, however, citizen-
ship was the focus, not separatism. Many felt as much a part of Russia as of
Kazakhstan, and they did not want their ethnicity or their citizenship to be
fully distinct. All of Kazakhstan’s residents received citizenship in the repub-
lic, and only citizens would be awarded a stake in the privatization process
and the right to ownership of their residences. Still, Kazakhstan’s Russians
also felt that they were a part of Russia, and with the support of Moscow
they sought to be citizens of Russia as well.
Not surprisingly, the Kazakh government refused to give in to escalating
pressure on the question of citizenship in 1993 and 1994.4 Nazarbayev
consistently rejected the idea of dual citizenship. During those years, Rus-
sia’s policies went from a quiet endorsement of the ethnic Russians’ goals to
a strong defense of the rights of all Russians living in what Moscow saw as
its “near abroad.”5 They also tried to involve the international community
in their protection, and the OSCE High Commissioner for National Minori-
ties, Max van der Stoel, made several trips to Kazakhstan during this
period, in April 1994 issuing a letter that expressed concern over the devel-
oping situation.6
President Nazarbayev, nevertheless, remained unshaken in his belief that
Kazakhstan could not thrive as a nation if the loyalty of its citizens was con-
stantly in question as it would be if they were simultaneously the citizens of
two different and potentially competing states. Nazarbayev was not alone in
this conviction. All the CIS leaders, except the presidents of Turkmenistan
and Tajikistan, rejected the Russian demand for dual citizenship, and the
Turkmen government eventually backed away from this position.7
Nazarbayev was not willing to let the matter simply rest because he rec-
ognized that an accommodation had to be made to the desires of his coun-
Martha Brill Olcott | 57

try’s Russian population or risk that it might destabilize the country from
within. He proposed that Russia and Kazakhstan simplify the procedure for
exchanging citizenship in one state for that of the other, and Yeltsin agreed
in principle. In January 1995, the two leaders signed agreements that
defined the treatment of citizens of one state permanently residing in the
other and made it easier for such people to switch their citizenships.8 The
Russian Duma (parliament), however, did not pass the necessary enabling
legislation until 1998, when the local Russian population no longer felt as
comfortable in Kazakhstan as it had earlier. Russians were leaving the coun-
try in increasing numbers, up to nearly a half million (483,000) a year by
1994, and then in a steady but decreasing stream until 1997, when the
emigration of Russians began to increase again.9
Ethnic Russians often felt excluded from the country’s public life. In the
world of the Soviet Union, a Russian was usually standing behind every
Kazakh. The pattern of the proverbial Russian second secretary exerting
influence over the Kazakh first secretary was repeated through most Com-
munist Party and government hierarchies and in the leading enterprises in
the economy. In reality, the pattern of decision making was more compli-
cated, and access to power was not neatly predetermined by ethnic origin.
Almost all key decisions were made in Moscow and conveyed to the repub-
lic capitals, but those in the republics had a great deal of discretionary
responsibility for implementing them.
In Kazakhstan, as in the other former Soviet republics, the ruling elite
began to come disproportionately from the titular nationality. This has been
true since the first big government shakeup in October 1994, when five of
the six newly named vice-premiers were ethnic Kazakhs, and Kazakhs
accounted for all but a handful of senior ministry posts. Complaints from
local Russians that they were being eclipsed from political life initially
seemed to have had some impact because Prime Minister Akezhan
Kazhegeldin then brought in a number of prominent Russians to occupy key
posts, especially in the areas of finance and economics.10 Most of these Rus-
sians left after Kazhegeldin’s departure in October 1997, and the new
streamlined administration brought to power by Nurlan Balgimbayev was
once again heavily Kazakh in makeup. By this time, though, deteriorating
economic conditions made the ethnic makeup of the cabinet portfolios
seem irrelevant to most Russians.
In a post-Soviet world in which images of interethnic violence are com-
monplace, it is important to maintain a sense of perspective when talking
58 | The Challenge of Creating Kazakhstanis

about the state of interethnic relations in Kazakhstan. Interethnic differ-
ences were an irritant in Kazakhstan, but they have not been a cause for an
unbreachable rift in the social fabric. What is less clear is whether the poli-
cies of the Nazarbayev government have the capacity to ignite interethnic
strife like dry timber should rising nationalist sentiments among small
groups of Kazakhs and Russians be set off by a spark from within or even
outside the country.
Kazakhs and Russians have been living near one another for more than
three hundred years. For virtually all their shared history they have been
able to accommodate themselves to one another peacefully. Until now, the
rules of this accommodation have left the Russians in charge of the Kazakhs,
who were allowed varying amounts of communal self-rule. Now the situa-
tion is reversed. For all the talk of a multi-ethnic Kazakhstan, it is the
Kazakhs who now dominate in the republic. They are the country’s most
prominent political and economic leaders, and for the first time, it is the
Russians who must take their cues from them. The former colonists find
themselves in a difficult position, and the figures for outmigration elo-
quently speak to the difficulties that ethnic Russians are having accommo-
dating themselves to the situation.

Decreeing Patriotism

Those living in Kazakhstan do not seem to be developing a strong sense of
civic pride or loyalty to their new state. In late 1995, a slender 22.9 percent
of respondents admitted in a newspaper poll that they were “proud to be
Kazakhstanis,” as opposed to the 40 percent who said that they were “sat-
isfied” with their citizenship, and the 30.6 percent who characterized their
feelings as “indifferent.”11
It would be premature to expect them to have developed civic pride
even now. However, patriotism should not be confused with ethnonational
pride. The latter is something of which neither the Kazakhs, nor the other
populations who live in the country, are short. Yet despite the recent rewrit-
ing of Kazakh history to stress the state-building agendas of their premod-
ern ancestors, the country’s titular nationality has not managed to translate
its ethnic pride into a coherent and widely accepted ideological defense of
its unique nation-state. Nor has the government managed to transcend eth-
nicity to give all the country’s ethnic groups an equal or nearly equal stake
Martha Brill Olcott | 59

in their new homeland. Such transcendence was certainly one of the goals
of the authors of the 1995 constitution, which for the first time refers to the
“people” of Kazakhstan, who are “united by a common history.” It also omits
all reference to ethnic Kazakhs and to their special rights, substituting for
this a reference to the rights of individuals and their right to preserve their
cultures.
The government would like to do both simultaneously: to make
Kazakhstan special for the Kazakhs, while stimulating civic pride for all
other nationalities. At times they have stressed one goal over the other, and
as more Russians leave the country, the state ideology that is being fashioned
has become more explicitly pro-Kazakh.
Most of the symbols of statehood are drawn from the Kazakhs’ history or
culture. The flag is blue, the color associated with the Turkic Khaganate that
dominated the steppe before the Mongols and Kazakhs. It has a sun, an
eagle, and a traditional Kazakh ornamentation at the side. The center of the
state emblem is the view of the world as seen from the inside of a yurt, the
traditional dwelling of the Kazakh nomad, and is surrounded by a stylized
version of a shield. The state hymn as well is designed for a Kazakh audi-
ence, describing a homeland of the Kazakh steppe and speaking of the need
to preserve the mother tongue, and it is difficult to find a Russian transla-
tion of it in the country’s stores and kiosks.12
The government also wants the ideology that it is developing to have
meaning for all the country’s nationalities. Pressure for this is caused in part
by the withdrawal of the state and the privatization of many of its previous
functions. In the face of deteriorating economic and social conditions, the
government has resorted to an age-old tactic for trying to gain support: if
you cannot satisfy the material demands of a population, then try convinc-
ing them that their ideological or spiritual needs are being met instead.
Kazakhstan’s government officials recognize that they are no longer per-
forming many of the tasks that the governed expect from their governors,
and the elite hopes to fill this gap by arousing public support for a newly
defined civic nationalism.
The country’s leadership recognizes that there is an ideological void in the
society, the space left by the discrediting of the omnipresent Soviet ideology.
The citizens in every state need to possess a system of beliefs that tries to
define public conduct; that explains why some behavior is forbidden, some
frowned upon, and some favored; and that places the state in a favorable
spot on that continuum. The vilification of a previously widely upheld belief
60 | The Challenge of Creating Kazakhstanis

system has created the risk that people will find their own ideological or
moral signposts for organizing their lives and evaluating their actions. In
their search they might make “unacceptable” choices that could lead to the
formation of potentially powerful radical religious or nationalist movements.
The pervasiveness and universality of the communist ideology made the
need for a replacement ideology seem even more pressing. Communism was
invoked at every turn of Soviet public and private life, much like a law of
nature. In that sense communism was akin to the state religion in a theoc-
racy; it was understood to be a true and unarguable description of the nature
of the universe. This made former Soviet citizens appear particularly sus-
ceptible to other all-encompassing ideologies. For others, disproving of the
“truth” of the old ideology discredited the idea that an intellectual and spir-
itual framework governs human behavior and made following the law of the
jungle seem the best strategy for survival.
There is evidence of both impulses in Kazakhstan. There has been an
explosion of crime that is partly a manifestation of contempt for anything
save personal enrichment, while the growth of nationalism, clanism, reli-
gious fervor, and other varieties of exclusivist social bonding is driven by the
hunger for an intellectual construct that both assigns the blame for the dis-
comforts of the present day and indicates the one true path by which these
discomforts may surely be overcome. Their long years of experience under
communism have made the inhabitants of the new republics particularly
susceptible to the conviction that there is but one truth, and so it drives
them to seek one and, when they feel they have found it, to impose this
truth on those about them.
Those running Kazakhstan have been raised in the conditions of the
Soviet Union and still believe in the capacity of the state to shape the world-
view of those whom they govern. They do not believe that social engineer-
ing as such has been discredited, just the work of the Soviet-era social
engineers. Thus, they continue to spew state doctrines and plans for creat-
ing state ideologies designed to bring together the country’s various ethnic
communities.
In the wake of the collapse of a universal communist ideology, the task
of creating an inclusive national identity is a particularly difficult one, to
which Kazakhstan’s leaders have devoted considerable energies. Their posi-
tion is best summed up in a 1996 official statement of Kazakhstan’s state ide-
ology, or, as it is formally termed, its state identity. According to this the goal
of the state is:
Martha Brill Olcott | 61

To confirm in society the idea that Kazakhstan is our common Moth-
erland. The duty of every citizen, no matter what his nationality, is to
assist in the creation of an atmosphere of friendship, peace, and agree-
ment. In many countries the spirit of patriotism cultivated there pro-
motes: the strengthening of the state; the consolidation of a society
ruled by pride for the state; the faith that the state is ready to defend
the interests of the citizen at any time, no matter where he is; a ten-
der flutter of feeling for the symbols of the state.13

This document, and the similar ones that have preceded it, acknowledge
that these sensations do not yet exist, defining the present moment as one
of transition, but it then goes on to elaborate a definition of the state that will
warrant such patriotism in the future.
One important source of patriotism, of course, is the emotional tie of the
Kazakh people to their land. As the 1996 statement puts it,

Kazakhstan is the ethnic center of Kazakhs; they have no other state
in the world which has demonstrated concern about the preservation
and development of the Kazakhs as an ethnic group, about their cul-
ture, way of life, language, and traditions. The definition of
Kazakhstan as a national state must identify the state in this capacity
first of all.

The reason such a definition is important, the document argues, is that
“the logic of ethnic evolution defines the inevitability of the appearance of
the state as an instrument to preserve the material and spiritual conditions
for the existence and development of the nation.” At the same time,
Kazakhstan’s government acknowledges that the needs of all the nationali-
ties of the country must be met, which is why the statement of state iden-
tity affirms the goal of creating a democratic system. Citing the republic’s
second (1995) constitution, the document affirms that Kazakhstan is to be
a “democratic, secular, social state of law, the highest values of which are
man, his life, rights, and freedom.”
An effort is to be made to transform the state into a rule-of-law society,
where, as the document states, “in the event of a violation of their rights the
citizens [will] appeal to the courts first of all, rather than to an executive
body,” because they will be secure in the belief that “all are equal before the
law.”
62 | The Challenge of Creating Kazakhstanis

There are certain clauses of the statement, however, that reveal the con-
flicting tensions at play in the republic. Perhaps the most revealing passage
is one elaborating the relation between the citizen and the state. In this offi-
cial analysis, there are two world traditions: one in which the citizen is a part
of the whole, whose personality and social identity are realized only through
common traditions and institutions; and the other, in which the citizen is
an individual set apart from the government, whose support for the gov-
ernment is based upon giving up liberties in return for certain services pro-
vided by the government. Tellingly, Kazakhstan’s official ideology
recommends that the optimal conception for the republic is a synthesis of
these two positions, since in terms of history it is the state that is constant
and the citizen who is contingent. A citizen may leave the state, after all, or
may be removed by the natural processes of aging, while the state remains
one of the common values of the people. The state is further defined as uni-
tary and cannot contain within it other ethnonational or autonomous gov-
ernmental structures. There is a single citizenship, legislative structure, and
system of governmental power.
This view of the state also justifies Kazakhstan’s choice of the presiden-
tial form of democracy, creating a president who is elevated above all the
structures of power in order to serve as “the guarantor of the republic’s
unity and the constancy of the Constitution and of the citizens’ rights and
freedoms.” Such an injunction takes for granted, of course, both that the
interests of the state and people coincide, and that “the people” will share a
single, and discernible, group of interests. It can easily be argued, however,
that one of the most obvious changes in Kazakhstan since independence has
been a rapid and pronounced differentiation in the interests of the citizens
according to their ethnicity, their place of residence, their age, and their
position in Kazakhstan’s ever-more lopsided economy.
An invocation of claims to understand and speak for “the people” is in
part a habit of Soviet-era thought. In both Kazakh and Russian, the word
that we translate as “the people” is grammatically and intellectually singu-
lar, unlike the analogous English term, which clearly implies a plurality of
individuals grouped together. Both the Russian and the Kazakh term for the
citizens of the state make it easy to suppose them to be of a single mind, and
the belief that they can be made to behave as though they were of a single
mind is at the core of official efforts to create a state ideology.
Accordingly, this makes it easier to claim that the people’s common inter-
est is identical to that of the state, which allows Kazakh leaders to argue that
the preservation of stability, guarding the current state from unwanted pres-
Martha Brill Olcott | 63

sure to change, is the maximum common good. It is the responsibility of the
citizen to support the state in its efforts to “preserve social stability, civil
peace, [and] interethnic concord,” while the state will intercede as guaran-
tor for those who have neither the “material nor spiritual possibilities for
existence and self-realization.” In practice, according to the 1996 docu-
ment, that means the state will guarantee its citizens a minimum wage, a cer-
tain level of free medical care, and free secondary education, while also
mandating the length of the work day and work week, state holidays, and
yearly vacations.
Kazakhstan’s citizens are obligated “to prompt the state toward correc-
tions in the policies it pursues.” This must be done, however, without
endangering social harmony and stability. While political parties are encour-
aged, the issues they take up are to be limited, in part by the requirement
that they too have the interests of the state and people at the center of their
programs. Political parties may not argue for a particular group of ideas or
people, and there is a specific injunction against religiously based political
parties. The need for social harmony is seen as paramount. Thus, while the
1996 statement does not repeat this rather open defense of politically based
censorship, it does urge the strict regulation of the activities of foreign reli-
gious organizations on the grounds that these have been engaged in a kind
of “spiritual intervention in the ideological vacuum of society.”
In an earlier statement of ideology, Nazarbayev also reserved for the state
the obligation to “regulate the information balance,”14 restricting the flow of
information into the republic, so as to minimize the influence of alien opin-
ions within the state. In that 1994 statement Nazarbayev expressed the fear
that “young independent states frequently find themselves under the strong
pressure of opinions imposed from outside,” which leads to “complex inter-
nal processes with their particular logic [being] evaluated by an outside
view, frequently explained superficially and, at times, tendentiously.”15 Thus,
Nazarbayev argued, the indigenous media must be protected and shaped,
until they learn to “uphold the interests of the republic and create their
own information space in the world’s political arena.”

State Ideology Formation in a Nationalist Age

The soft censorship that is increasingly more characteristic of the country’s
political climate makes it hard to gauge how well the government is doing
in its efforts to evoke patriotism. Growing restrictions of free political dis-
64 | The Challenge of Creating Kazakhstanis

course, marked in particular by growing pressure on the media, make it dif-
ficult to offer much more than anecdotal evidence because those who
research public opinion in Kazakhstan must remain sensitive to the implicit
constraints of the environment in which they are working.
The evidence that is available points to incomplete ideological transfor-
mation. It seems to have been far easier to get people to renounce the polit-
ical ideology of the Soviet Union than to abandon the social contract that
went with it. The Kazakh government is still being judged by what mater-
ial benefits it provides its citizens. The younger generation appears to be less
ideological and more cynical than their parents, but they seem to retain
their parents’ expectations that the state will meet its citizens’ social welfare
needs.
The Kazakh government’s embrace of the vocabulary of postcolonialism
has further divided the country into the colonized and the colonizers.
Although this is not an explicit part of the ideology, it has become a more
powerfully implicit one, especially since Russia has continued to weaken.
This hastens the departure of ethnic Russians and other Slavs and also helps
to alienate a Russified Kazakh elite from other Kazakhs. Many in Kazakhstan
may see both things as positive, but their departure and alienation also have
explicit consequences for the political and economic development of the
state. In this regard, at least, the implementation of Kazakh government
policy is completely at odds with its officially stated purpose of fostering
interethnic harmony.
These efforts at ideological transformation are also creating a genera-
tional divide, one that might someday translate into mass support for a
communist or socialist revival. For now at least, movements that advocate
a return to the policies of the Soviet past draw support disproportionately
from the older generation, which is decreasing in numbers each year.
More likely the state-sponsored ideological tenor of postcolonialism
will continue to divide the population along ethnic lines and create the
various ethnically rooted forms of radicalism that the state has identified
as antithetical to its goals. This risk is easier to identify, though, than it is
to control.
The emergence of nationalism as the most common replacement ideol-
ogy for communism in most of the neighbor states has worsened the prob-
lem of identity for more multi-ethnic states like Kazakhstan, and even more
so when the Kazakhs felt entirely vulnerable to Russian pressure. As already
noted, Kazakh leaders no longer feel that the country must take cultural and
Martha Brill Olcott | 65

political direction from Russia, but that Kazakhstan’s own economic and
security needs should be the driving force in the relationship.
The “Kazakhness” of the state was always a part of official ideology. Just
as the 1993 constitution claimed its first political authority to arise from the
“the Kazakh people,”16 so the 1996 statement of ideology bases itself on the
claim that: “The territory of the republic of Kazakhstan . . . has since the
most ancient of times been settled by large empires and separate khanates
of the Turkic peoples, the ancestors of the Kazakh people. Since the fif-
teenth century this was the territory of an independent government, the
Kazakh khanate, the world’s first state organization of Kazakhs.” Thus, while
making the necessary bows in the direction of multi-ethnicity, the various
statements of state ideology also assert unambiguously that, as Nazarbayev’s
1993 statement put it, “There is only one way of realizing national interests,
which consists of a guarantee of the equality of all peoples with the inte-
grating role of the Kazakh nation.”17
It is difficult to be certain what is meant by “the integrating role of the
Kazakh nation,” in part because the same document also specifically rejects
the political heritage of the Kazakh past “based on a resuscitation of archaic
forms of social arrangement, tribal mentality, and a system of legal views
characteristic of the territorial organization of Kazakh society in the eigh-
teenth and nineteenth centuries.”18 This is a reference to the traditional divi-
sion of the Kazakhs into three zhuzes, the Small, Middle, and Great Hordes.
Largely because of the direction from which Russian conquest came and the
speed with which it advanced, it was the Great Horde that managed both
to preserve more of its subethnic identity and to take most of the govern-
ment positions in the Soviet period, which means that it continues to con-
stitute the greatest part of the republic’s elite today.
The government also draws a strong line between clan and family. While
many would claim that clan politics plays an important role in the country,
this is officially denied. Family, though, is quite another thing. President
Nazarbayev’s 1993 statement urges support for “development of the national
language, art, culture . . . and the family.” In his public presence, the pres-
ident is very much a family man, being frequently photographed with his
wife, children, and grandchildren.
There is no escaping the central role of the official family in Kazakhstan’s
formal public life. His wife, Sara Alpysovna, is very much Kazakhstan’s
first lady, heading an active national children’s charity called Bobek.
Nazarbayev’s oldest daughter, Dariga, was the head of the only independent
66 | The Challenge of Creating Kazakhstanis

national television channel, Khabar, and remains in the public eye. His
youngest daughter, Aliya, became a public person, if only briefly, in July
1998 when she married the oldest son of Kyrgyzstan’s President Askar
Akayev. The marriage, which was celebrated in a highly public fashion, was
put forward as an example of the closeness of the two nationalities and the
symbolic joining of their two newly independent states. The two presi-
dents are also distant cousins, or at least publicly claim to be, a fact that was
also played up at the time of the marriage of their children. The marriage
was treated as history in the making, and its seeming failure is rarely dis-
cussed. All this is in addition to the prominent economic and political
roles played by Nazarbayev’s two older sons-in-law, Timur Kulibayev and
Rakhat Aliyev. In their cases, though, their formal ties to the president are
generally not emphasized.
The increased importance of family is strengthened by the leadership’s
continuation of the Soviet practice of reinforcing the approved view of his-
tory by elaborately staged public ceremonies. The occasions chosen are all
new ones that emphasize Kazakh cultural continuity and the strengthening
of dynastic rule.
An example is Unity Day, declared on May 28, 1993, on Ordobasy Hill
(outside Shymkent), chosen to memorialize a 1726 meeting of three Kazakh
elders, or biis, who joined forces to oppose (unsuccessfully) the Jungar Mon-
gols who were invading from the east. The celebration drew more than
50,000 people, including: official representatives from each of Kazakhstan’s
then nineteen oblasts; the presidents of Kyrgyzstan and Uzbekistan; a
Kazakh akyn, or oral poet, who chanted the history of the first meeting; and
flocks of people demonstrating traditional Kazakh dances, crafts, and sports.
While such an event may have fostered feelings of unity among the partic-
ipating Kazakhs, and even perhaps a certain solidarity with the Kyrgyz and
Uzbeks who attended, it is hard to imagine that Kazakhstan’s Russians, Ger-
mans, or Ukrainians identified with it. It is equally difficult to imagine that
non-Kazakhs identified with similar events, such as the celebrations of
Kazakh writer Muhtar Auezov’s centenary and of the 1500th anniversary of
the founding of the city of Turkestan. These celebrations cost several million
dollars, which was charged to the 1997 state budget.
One gesture to the country’s non-Kazakh population was the creation of
a Eurasian University in May 1996 to serve a Russian-speaking population
from all the neighboring states. To give life to President Nazarbayev’s claim
that Kazakhstan is a bridge between Europe and Asia, the government
Martha Brill Olcott | 67

decided to name the university after Lev Gumilev.19 An attractive symbol for
the country’s varied population, Gumilev was the son of Anna Akhmatova
and the poet Nikolai Gumilev, who was shot by the Soviets in 1921. Incar-
cerated in Kazakhstan as a political prisoner during the Stalin-era,20 Lev
Gumilev went on to write books on the ancient history of the many peoples
who inhabited the Kazakh steppe from antiquity to the present.21 Although
Gumilev was criticized by the Russians for exaggerating the role of Turkic
peoples in Russian history and by the Kazakhs for underestimating it, the
Kazakh and Russian versions of his pamphlet “I am a Eurasian” were both
bestsellers in Kazakhstan.22
In general, though, Kazakhstan’s effort to construct a new public history
repeats some of the failings of Soviet-era attempts, when, to quote President
Nazarbayev, “there was a discrepancy between the ideological symbols and
people’s real values.”23 Inflated and dubious claims to past glories usually do
not convince skeptics, but rather incline them to greater cynicism. Similarly,
equating oral works and written literature and maintaining that traditional
Kazakh thought is somehow superior to European philosophy (with an
utter disregard for the core religious heritages upon which each draws even
though Kazakh writers have sometimes made just such claims)24 will only
make other ethnic groups view them with genial contempt.
Kazakhstan’s government has not yet fully grasped that the development
of a strong and Kazakh-centered national identity need not be a cause for
interethnic antagonism. With the exception of a small group of extreme
nationalists, the Kazakhs on the whole look on their shared history more
benignly than do many other former colonial peoples. The difference
between Kazakh and Uzbek attitudes toward Russian rule is striking in this
regard. The Uzbeks have always seen their culture and civilization as not just
equal to, but superior to that of the Russians. By contrast, even today most
Kazakhs will grant that Russian culture was an appropriate vehicle for join-
ing the Kazakhs to world culture. For example, compare the statements
made on the questions of past ties to Russia by President Nazarbayev and
his counterpart in Uzbekistan, President Islam Karimov. While both talk of
the need for the two states to continue to cooperate with Russia, President
Karimov refers to Uzbekistan’s colonial past and the Soviet period in pejo-
rative terms; he depicts those periods as times of cultural, economic, polit-
ical, and spiritual suppression that have now been lifted.25
By contrast, President Nazarbayev continues to depict the shared history
of the Kazakh and Russian peoples in substantially more positive terms.
68 | The Challenge of Creating Kazakhstanis

The injustices of Soviet rule were the product of incompetent or venal
rulers rather than a form of systematic ethnic discrimination foisted on a
weaker community by a more powerful one. The Kazakhs recognize that
the abuses of Soviet rule were applied to other cultures, and an effort is
made to distinguish Russian culture from Soviet rule. Kazakh culture is
praised for its inherently positive traditions, which were not compromised
by the approaching world culture through the Russian language and
culture.26
The Kazakhs, however, no longer need mediators to interact with the
global culture. Indeed, most Kazakhs feel that the sufferings they have
endured in roughly a century of colonial rule, followed by seventy years of
Soviet domination, have more than balanced the scales for the benefits that
they have gained during those years of Russian domination. Even the dis-
torting mirror of the Soviet view of history did not depict the union of the
two peoples as a wholly voluntary one. The conquest of Turkestan (which
included the lands of the Great Horde) was always presented as a Russian
military victory. Kazakhs and Russians, though, are both aware that they
share a centuries-old preoccupation with security threats from the east.
Both experienced defeats by the Mongols: the Russians with the imposition
of the Tatar-Mongol Yoke in the thirteenth century, and the Kazakhs during
their Great Retreat from advancing Kalmyk Mongols in the seventeenth and
eighteenth centuries. It was this latter crisis that led those Kazakh khans
whose pasturelands lay in the north to seek protection from the Russians,
whom they saw as the lesser of the two evils.
The Kazakhs’ first efforts to gain protection from the Russians in the sev-
enteenth century gained them little. The Russian tsars’ prime concern in the
period was to secure trade routes eastward through Siberia—not south-
ward expansion—and they believed that the fortress settlements of the Cos-
sacks provided better protection than did alliances with “primitive” peoples.
The first Russian fortresses were built by Cossacks along the Yaik (Ural)
River in the 1630s and 1640s.
The next groups of forts were erected in the first half of the eighteenth
century, stretching from present-day Orenburg to present-day Omsk. For-
mer Russian prime minister Viktor Chernomyrdin is a descendant of the
Cossacks who garrisoned those forts. Cossack descendants remain an
important political force in both southern Siberia and northern Kazakhstan.
In 1731 and 1740, respectively, the khans of the Small and Middle Hordes
appealed for protection to the commanders of these forts, leading most of
Martha Brill Olcott | 69

present-day western and northern Kazakhstan to come under Russian
protection.
The resulting ties between the Russians and the Kazakhs were loose. The
Kazakh khans paid tribute to the Russian tsar, who also held “captives” from
the Kazakh royal families as security. The Kazakh khans generally found
this arrangement agreeable, as it kept the Kalmyk Mongols at bay, and the
Russians allowed the Kazakh rulers to manage their tribesmen as before. The
Kazakh rulers of the Great Horde in southern Kazakhstan continued fight-
ing against the Kalmyks, who were themselves soon defeated by the Chinese
to their east. The eastern part of the Great Horde wound up paying tribute
to the Chinese, while most of the other clans had to pay the Uzbek khans in
the south.27
In the late eighteenth and early nineteenth centuries, during the reigns
of Catherine II and Alexander I, Russia’s priorities changed. Both rulers
showed far more concern with governing the territories that were under the
tsar’s control, as well as a much greater interest in southern expansion. The
rights of Kazakh self-government were sharply curtailed. The Russians were
no longer willing to tolerate the increasingly less competent rule of the
Kazakh nobles, whose authority was openly challenged by internal power
struggles. Russia’s growing presence in the steppe had created many new
economic problems to replace the earlier security issues. Thus, from the
mid-nineteenth century on, the Russians became both the Kazakhs’ enemy
and their “civilizer.” When the Russians moved southward to conquer the
lands of the Great Horde, they were met with armed resistance. These lands
were eventually subdued with the help of Cossack irregulars who estab-
lished a new line of forts in what is now southern Kazakhstan. Some of their
descendants still live in Kazakhstan’s Turgai oblast (near the Chinese border
in what is now Almaty oblast).
The children of the Kazakh nobility (from the Small and Middle Hordes)
for the most part fared well under Russian rule. Following the Tatar model,
they functioned as cultural intermediaries. These intellectuals also deter-
mined that the Kazakhs should survive as a distinct people. In the second
half of the nineteenth century, they created a modern Kazakh written lan-
guage and sponsored schools that forced young Kazakhs to master Russian
as well as Kazakh.28 Like the Tatars, most Kazakhs were Muslim moderates,
believing that Islam would survive only if it reconciled itself with the moder-
nity of the Europeans. The fundamentalist Islam of the Turkestanis to the
south was not much in evidence in the Kazakh steppe.
70 | The Challenge of Creating Kazakhstanis

Even the most apparently assimilated of these intellectuals believed that
pastoral nomadism was at the heart of Kazakh culture and national identity.
This increasingly pitted them against a Russian government that was com-
ing to see the interests of nomadic livestock breeders as being in conflict
with those of the country’s land-starved peasants. This came to a head under
the reform-minded Stolypin government, which opted to solve Russia’s land
problem by sending out millions of Russian and Ukrainian homesteaders to
work Kazakh lands that were declared to be surplus. Few Kazakhs saw this
as a positive development. World War I and the Bolshevik Revolution inter-
vened before Stolypin’s project could be completed, but not before tens of
thousands of Kazakhs were pushed out of northern Kazakhstan. Hundreds
of thousands more were evicted from southern Kazakhstan after an anti-
Russian and anticonscription uprising in 1916.29
The Bolshevik rulers showed an even greater lack of consideration for
Kazakh sensibilities as they sought to achieve ideological goals as well as
economic ones. They resettled “kulaks” in Kazakhstan and forcibly ended
nomadic livestock breeding with the collectivization drive of the late 1920s
and 1930s, which resulted in millions of deaths, and in the exodus of hun-
dreds of thousands Kazakhs.30 Khrushchev delivered the final insult in the
1950s when he sent thousands of Russian and Slavic “volunteers” to create
a second USSR breadbasket from Kazakhstan’s Virgin Lands, pushing most
of the remaining Kazakh collective farmers out of northern Kazakhstan.
These policies left Kazakhs with complex feelings about the nature of the
Soviet experience. Certainly, it ended the pastoral nomadism of their ances-
tors and thoroughly changed the defining relation of the Kazakh people to
their land. The traditional foods and ceremonies of the nomadic past may
be preserved and remembered on special occasions, but there is no serious
talk of returning the Kazakhs to their pastoral nomadic past.
The largest single grievance that the Kazakhs have against Russian and
Soviet rule is that they were left a minority in their newly independent state.
Their feelings on this are by no means uniform across society. Unlike in the
Baltic states, there is little talk of the Soviet period as one of “foreign occu-
pation.” The small and vocal group of nationalists who have made such argu-
ments have lacked wide popularity. Most Kazakhs see their nation as young
and lacking a history of juridical statehood as defined in the Western sense.
Kazakhs are proud to be descended from the traditional society that ruled
the steppe and see this past as a fine symbolic foundation for modern
Kazakhstan. Virtually all Kazakhs also feel a sense of debt to the Russians.
Martha Brill Olcott | 71

Some of this is socioeconomic; the Kazakhs credit the Russians with bring-
ing them the advantages of modern technological society, and, most impor-
tant, with developing the educational systems necessary for the Kazakhs to
sustain their level of development without direct Russian assistance.
Kazakhs see the Russian people as neighbors with whom they have
shared triumphs and tragedies. They fought World War II together, and the
commemoration of the victory remains an important national holiday. The
Kazakhs also recognize the shared suffering of the Stalin years. Hundreds of
thousands of Soviet citizens were deported to Kazakhstan, including whole
peoples, like the Volga Germans, the Crimean Tatars, and the Chechens,
who were decreed genetically disloyal during World War II. The luckiest of
these were given all but barren ground to cultivate in common; the most
unfortunate were assigned to hard labor at one of Kazakhstan’s prison
camps, where many prominent Kazakh intellectuals and political figures
died alongside their Russian and other fellow citizens.
Some of the Kazakhs’ affinity for the Russians is cultural. The Kazakhs see
themselves as a small people in a world in which small peoples are rarely
granted the chance to stand alone. Most Kazakhs feel that history might have
given them far crueler overlords, like the Chinese or the Mongols, or even
a despotic Islamic ruler conquering them from the south. This probably
helps to explain why various surveys in the country have confirmed that
most Kazakhs continue to be willing to learn and use Russian, although they
do not believe that Russian should be used to the exclusion of their own
national language.31
A 1994 survey found that some 78 percent of the Kazakhs questioned
thought that the Kazakhs should continue to learn Russian. This should not
be particularly surprising since 51 percent of those Kazakhs surveyed still
used Russian at work, and 55 percent identified it as the language that they
use when speaking to friends and neighbors, while only 26 percent reported
that they speak Russian at home.32
This imbalance between the languages of public and private life is chang-
ing, and Kazakh is replacing Russian in all spheres of public and private life
as the generation educated since independence is coming of age. Younger
Kazakhs already feel less strongly that Russian should be taught than do
older ones because independence means they can choose the cultural medi-
ators through which they approach the world. English is now enormously
popular in Kazakhstan. Rich or intellectually gifted students may now dream
of studying in the West, and Moscow is fading as a desirable destination.
72 | The Challenge of Creating Kazakhstanis

For now, Russian remains the language of business, and most ordinary
Kazakhs still orient themselves to the outside world largely through a Russ-
ian linguistic or cultural lens, preserving with it the complicated mix of
gratitude for the advantages that the Kazakh peoples gained through their
access to Russian civilization and the deep anger for the pain and suffering
brought by Russian colonial, and later, Soviet rule.

Russian Objections to Decreeing a Kazakh Nation

Local Russians do not believe that dominance by the Kazakhs is in the nat-
ural order of things. It is hard to judge whether ethnic Kazakhs or the local
Russians benefited more from the social and political arrangements of the
Soviet period, although each group saw the other as the principal benefi-
ciary. Kazakhs viewed themselves as a subject population; they became the
near-equals of the dominant population only when they accepted the latter’s
political, economic, and cultural ground rules. Russians took their linguis-
tic and cultural primacy for granted, but they felt victimized by a two-tiered
system that, although controlled by a Russian-dominated Communist Party
elite in faraway Moscow, was managed by local Kazakh-dominated repre-
sentatives. Even in northern Kazakhstan, the Russian-dominated Commu-
nist Party nomenklatura was immediately subordinate to the
Kazakh-dominated republic party structure. Many Russians felt taken
advantage of by the Kazakhs, who they saw as reaping the benefits of the
Soviet social welfare system by having large families without making a pro-
portionate contribution to the state economy. They give little credence to
Kazakh claims that Moscow had taken far more out of this resource-rich
republic than it had reinvested in the very social services that the Russian
residents bemoaned as being too generous.
The Kazakh national revival made local Russians uncomfortable from
the start. Russian nationalist groups developed during the Gorbachev era
alongside Kazakh ones, and both communities saw the control of linguistic
space as critical to the defense of their cultures. The 1989 legislation that
named Kazakh as the official language of the republic led to a marked
increase in Russian nationalist activity in Kazakhstan. Much of this was
organized by Yedinstvo (unity) and, after independence, by LAD as well.33
Although the language law specified that the affairs of government in the
predominantly Russian regions would still be carried out in Russian for fif-
Martha Brill Olcott | 73

teen years, its passage made clear that the political and cultural life in
Kazakhstan was changing in ways that ethnic Russians were almost power-
less to influence. Most ethnic Russians did not know Kazakh; less than
1 percent of the Russians in the republic claimed fluency in Kazakh in the
1989 USSR census; and few had any interest in mastering the language. In
a 1994 survey of local Russians, two-thirds of the respondents answered that
they should not have to learn Kazakh,34 and only those Russians who lived
in southern Kazakhstan believed that they should be obliged to learn the
language of the titular nationality.35
The debate surrounding the 1989 language law and the 1997 language
legislation strengthened the Russians’ perceptions of discrimination. They
felt especially aggrieved at the 1997 law, for unlike with the earlier version,
there was no turning to Moscow for intervention. Initially, the 1997 legis-
lation made important distinctions between Kazakhs and all other nation-
alities; ethnic Kazakhs were expected to function in the Kazakh language
several years earlier than non-Kazakhs were, as though to emphasize the dif-
ferent role to be accorded the two groups of people. This provision disap-
peared when the versions passed in the upper and the lower houses were
reconciled, and the grace period for language mastery by all citizens was
extended to January 1, 2006. The law purports to provide virtually equal
status for the Russian and Kazakh languages, and it is designed to put
Kazakh on the same footing as Russian, requiring that it too be a language
of command in the armed forces and police and security services. Russian
activists, though, have complained that the law effectively turns Kazakh
into the sole state language since it requires that Kazakhstan’s executive
branch list managerial, administrative, and service-sector posts for which a
knowledge of Kazakh is required and provides for language certification
through proficiency exams. The legislation also mandated that a minimum
of half of all television and radio broadcasts be in Kazakh, in both privately
and publicly owned media outlets.36
The growing use of Kazakh in the media has added to the sense of alien-
ation of ethnic Russians. Broadcasts from Russia have steadily declined over
the past several years. Initially this was because the Russian stations refused
to pay the asking price for access to Kazakh airways. Now many argue that
the Kazakh government is using these payment requirements and the pro-
visions of the language law to limit public access to the unfavorable Russ-
ian coverage of events in their country and to ensure full control of the
airways by the Kazakh government.
74 | The Challenge of Creating Kazakhstanis

Formerly, those living in Kazakhstan could subscribe to the major
Moscow newspapers as easily and as cheaply as those living in the Soviet
capital. Many of these publications were available after independence, espe-
cially while Kazakhstan was part of the ruble zone. Now it is so costly that
few are interested in subscribing to the Moscow press. Those with access to
the Internet, however, are finding some small relief. There is still a wide
selection of books printed in Russian in Kazakhstan, and popular fiction
from Russia reaches Kazakhstan, but with a market of some ten million
Russian-language readers, the quality and scope of Russian-language pub-
lications are considerably limited. The economics of publishing creates
greater problems than does political censorship but political volumes, pub-
lished in Russia by Kazakh and Russian opposition figures alike, are subject
to seizure.
The Russian-speaking population’s lack of knowledge of Kazakh is an
underlying cause of the strained interethnic relations in the country. What
seems to anger the Russians most are the petty indignities of not under-
standing what is going on around them when they are addressed in public
in Kazakh. Russians do not understand why some Kazakhs who know Russ-
ian still insist on addressing them in Kazakh, while the Kazakhs are angered
by the presence of so many people living in their country who cannot
exchange even polite greetings in the local language. This said, Russians who
are able to receive Kazakh language instruction as a component of their
working life are usually willing to do so.
Yet anecdotal evidence suggests that Russians do not believe that learn-
ing Kazakh will reverse their diminishing influence in the country. This is
supported by Kazakh, Russian, and Western field research in Kazakhstan.37
David D. Laitin, who has studied the responses of the Russian diaspora in
a number of post-Soviet states, argues that the economic payoffs of learn-
ing Kazakh are unclear and that the incentives are further diminished by the
colonial pattern of relations between the Kazakhs and the Russians. The
Kazakhs were linguistically highly assimilated and were fairly isolated from
positions of importance outside their own republic in the Soviet era. Laitin
claims that this combination makes Russians unwilling to strive for even
partial assimilation. He sharply contrasts the situation in Kazakhstan with
that in Estonia, where ethnic Russians will often go to considerable lengths
to learn the language and become integrated in Estonian society.38
The prospects for Russian influence began to decline at the same time
that semicompetitive elections were introduced in the republic. Kazakhs
Martha Brill Olcott | 75

were overrepresented in the Soviet-era Supreme Soviet of Kazakhstan. This
did not bother the Russians when that body was politically impotent, but
when the legislature gained some power, Kazakhstan’s elite took care to
shape the nomination and election process. Those favored were dispropor-
tionately, but not exclusively, ethnic Kazakhs. The Supreme Soviet elected
in March 1990 was 54.2 percent Kazakh and 28.8 percent Russian in
makeup, compared with 46.7 and 41.8 percent, respectively, in the prede-
cessor body elected in 1985.39 The Kazakh elite that dominated this last
Soviet-era body no longer acted like the timid Communist Party func-
tionaries they had once been, and the legislators forcefully advanced Kazakh
interests on key questions.
Before independence, local Russians were for the most part tolerant of
Kazakh nationalist aspirations, which echoed their own attempts to reclaim
lost national rights. While Russians were not eager to learn Kazakh or
pleased to see familiar place names replaced to commemorate Kazakh
national heroes of whom they had no knowledge, most accepted this as part
of the national revival. Russian cultural figures were being restored along
with Kazakh ones, if not by the government in Almaty, then by the author-
ities in Moscow. After independence, however, a fear of the language laws
and the cultural reversals that they represented eroded Russian support of
the Kazakh national revival.
In 1991 the Russians were embarrassed by their almost total ignorance
of the local language; by 1994 that sentiment was replaced by the convic-
tion that the state should protect Russians and Kazakhs equally and should
not relegate the Russian language or culture to second-class status.40 Rus-
sians were beginning to see themselves as a minority fighting to define the
nature of their state.

New Understandings of Boundaries

The past several years have seen a hardening of the boundaries between the
newly independent states of the region, which has served as an added source
of tension between the governments and the minority communities that
live in them. The Russian government’s decision in 1999 to begin demar-
cating and defending the Kazakh-Russian border is a good indication that
it sees the current independent status of Kazakhstan as nonnegotiable and
that they believe that only minor shifts in territory between the two states
76 | The Challenge of Creating Kazakhstanis

are likely to occur. This is good news for the Kazakh government, which is
also introducing formal border controls and can now more easily prevent the
penetration of its country by seditious groups or ideas.
There has never been strong evidence that Russian nationalist groups
(including the Cossacks) pose a serious threat to the Kazakh state. While
Russian nationalists within the Russian Federation are vocal on the need to
support “compatriots” living in Kazakhstan and elsewhere and have formed
institutes and committees to study their problems, the fate of these
“stranded Russians” has never been a major campaign issue of mainstream
political figures.
Yet it seems likely that a substantial part of Kazakhstan’s Russian popu-
lation would vote for reunification with Russia if it were offered. In a 1994
survey, some 27 percent of those surveyed said that they saw the northern
territories of Kazakhstan as rightfully belonging to Russia, with an additional
14 percent saying that these territories should have autonomy within
Kazakhstan. In East Kazakhstan oblast 42 percent of those surveyed said the
northern territories should be part of Russia, as did 37 percent of those
surveyed in North Kazakhstan oblast, with an additional 11 and 16 percent,
respectively, supporting the idea of autonomy for those regions.41 The lack
of support for Kazakh statehood by the local Russian population could
explain why these two oblasts fell victim to the administrative “rationaliza-
tion” program in 1997 and were annexed to neighboring (and more loyal)
territories.
To advocate changing Kazakhstan’s current boundaries publicly risks
violating laws on inciting ethnic violence, and this had forced most militant
separatists in northern Kazakhstan underground, making it difficult to ascer-
tain their numbers. Most support reunification passively, but there is a vocal
minority of ethnic Russians living in northern Kazakhstan that is commit-
ted to redrawing Kazakhstan’s boundaries. They believe that the northern
half of most of the border oblasts belong in Russia, claiming that these lands
were shifted to Kazakhstan in the aftermath of the Bolshevik Revolution
when the Kazakh republic was still a part of the Russian Federation. These
Russian complaints, however, have little grounding in historical fact.
Although the Kazakh territory was enlarged from 1920 to 1924 to include
Orenburg, the boundaries were reset in 1924 and 1925 to recreate the old
colonial era ones.42
The Cossacks, in particular, have had an uneasy relationship with
Kazakhstan’s government since 1991 when their activities were legalized in
Martha Brill Olcott | 77

Russia. Banned from forming military detachments in Kazakhstan, the Cos-
sacks simply cross the border and participate in the legally sanctioned para-
military activities of the Orenburg and Omsk Cossacks, from whom most
were descended, and many in both countries advocate the creation of a sin-
gle autonomous Cossack Republic encompassing parts of northern
Kazakhstan and southern Siberia.
The status of Kazakhstan’s Cossacks is in sharp contrast with their priv-
ileged role in Russia, where Cossacks are enjoying a state-supported cultural
revival. Russian authorities have used Cossack units to ensure law and order
in parts of Chechnya and to patrol the Russian border with Kazakhstan.
Courted by Russian presidential contenders in early 2000, the Cossacks
have also become a new political force in Russia.43
The Cossacks see themselves as a distinct ethnic group and claim the
same rights that Kazakhstan’s other national communities enjoy.
Kazakhstan’s government classifies them as a sociopolitical grouping, inval-
idating Cossack claims to cultural self-preservation, not to mention to
national self-determination. It is hard to know how great a threat the Cos-
sacks are, or even to know how many of them still live in Kazakhstan. At the
time of the Bolshevik Revolution there were nearly seven hundred thousand
Cossack families living in the republic, but the Cossacks disappeared from
the formal census count after their military formations were outlawed in the
1920s. Although persecuted, thousands of Cossacks preserved their culture
and religion (Russian Orthodoxy) in secret closed communities and even
transferred military rank from generation to generation. Most lived on state
or collective farms near the Russian border, which has facilitated their join-
ing Cossack military groups in Orenburg. Many of these Kazakh Cossack
settlements simply flow into those in the neighboring Russian oblast, and
the Russian government has granted that there will be nine Cossack settle-
ments in Orenburg that will have no frontier guards.44 A smaller group of
descendants of Semirechie Cossacks lives in what used to be Turgai oblast
(now Almaty oblast), and these people are kin to Kyrgyzstan’s Cossacks.
Tens of thousands of other Russians have attenuated ties to the Cossacks,
often no more than a family memory that a grandparent was a descendant
of this community.45
Like South Africa’s Boers, the Cossacks acknowledge racial and cultural
differences from the people among whom they live, while rejecting claims
that they belong elsewhere. Just as the Boers assert that they are African, the
Cossacks’ demand for self-government is based upon continuous residence
78 | The Challenge of Creating Kazakhstanis

on a fixed territory for approximately three hundred years. This makes their
paramilitary nature—which they defend as a cultural tradition that involved
bearing only “cold” weapons (meaning no firearms)—troubling to the
Kazakh government.
The political agenda of the Cossacks comes up for periodic consideration
in northern Kazakhstan, although the government has prevented a national
debate on their status. The one exception was in 1995 when the defense of
a Semirechie Ataman, Nikolai Gunkin, was embraced by Kazakhstan’s Cos-
sacks, local Russian nationalists, and political groups in Russia. Gunkin was
arrested on January 8, 1995, for holding an unauthorized march and meet-
ing. Cossacks argued that the meeting, held at a cathedral, was devoted to
prayer. Gunkin was detained, and in November 1995, he was given a three-
month prison term.46 The Russian government and Duma decried the inci-
dent. The publicity surrounding the arrest and detention led to an airing of
Cossack and Russian nationalist claims. Russian television, for example,
reported Gunkin’s comments that Kazakhstan was a “fascist” state that
endorsed “genocide of Russians.”47
Still, despite some public outrage, Gunkin’s cause never fully took fire.
In part, this was because the public lacked the will to make this an endur-
ing popular cause, and in part because a number of prominent Russian
nationalists who might have agitated for the cause had earlier “coinciden-
tally” fallen victim to street hooliganism and decided to relocate in Russia.
The legal status of the Cossacks has improved because Kazakhstan’s lead-
ers have become more confident that their country will survive. In 1996
they were allowed to wear their uniforms in public and to sponsor meetings
and other organized activities. Yet they remain under suspicion and are
banned from engaging in paramilitary training, which they are said to do
clandestinely.
Although the Cossack threat may be exaggerated, the Kazakh govern-
ment disquiet is understandable. Kazakh Cossack leaders show no formal
recognition of Kazakhstan as a sovereign state and that as such it is free to
award the Cossacks a status different from the one enjoyed by their kin in
Russia. Kazakhstan’s Cossacks believe that since they suffered the same
persecution as those in Russia did during the Soviet period, they should
now receive equal compensation. They seem unable to grasp the fact that
the division of the Soviet Union into sovereign states left the Russians
free to take up past grievances and the Kazakh government free to ignore
them.
Martha Brill Olcott | 79

The various Russian media, however, give their cause good coverage,
and Russian nationalists from Kazakhstan use that to their advantage.48
Many are now active in political groups located and registered in Russia.
These groups, of course, are free to defend the rights of Kazakhstan’s Rus-
sians, while legally registered Russian national groups in Kazakhstan must
be cautious about their political programs. At first, groups in Kazakhstan
pushed for local autonomy for the northern regions, but the constitutional
reforms of 1995 sharply reduced the prospects of democratically elected
local governments being assigned a meaningful political role.
By this time ethnic Russian support for Nazarbayev was eroding as well.
Local Russians had liked the Kazakh president’s stance on preserving the
USSR and his subsequent interest in restoring some form of union.
Kazakhstan’s Russians supported plans that would in some way turn back
the clock; one 1994 survey found that a full 86 percent of Russian respon-
dents were in favor of the reconstitution of the USSR.49 This same poll
found that only 45 percent of the Russian respondents expressed complete
faith in the president. Sixty-seven percent of their Kazakh fellows did the
same.50 A 1995 study also found Kazakhs more supportive of Nazarbayev
than were the Russians. When asked who might best lead the country out
of crisis, 72 percent of the Kazakhs named Nazarbayev as opposed to only
55 percent of the Russians surveyed.51 Russian identification with opposi-
tion nationalist groups such as Yedinstvo and LAD increased as Nazarbayev’s
popularity declined. The support for such organizations grew from a scant
6 percent of respondents in 1991 to 26 percent in 1994.52
Local Russians remain oriented toward Russia. A USIA-sponsored survey
conducted by a local polling organization in September 1997 found that
Russians were nearly twice as likely as Kazakhs to favor the idea of
Kazakhstan entering into a close union with Russia such as that planned
between Belarus and Russia.53
Talk of the secession of the northern territories, though, is heard with
decreasing frequency in Kazakhstan. When it occurs, as it did with the
arrest of a group of alleged secessionists in Ust-Kamenogorsk in November
1999, it arouses a great deal of suspicion. There is much controversy over
what the group was and who was responsible for it. Of the twenty-two peo-
ple arrested, twelve were Russian citizens. Their alleged leader was identi-
fied as Viktor Kazimirchuck (who calls himself Victor Pugachev54) of the Rus
patriotic movement. The authorities in Kazakhstan charged that
Kazimirchuck gathered fifteen people, mainly former military officers with
80 | The Challenge of Creating Kazakhstanis

combat experience in Chechnya and Tajikistan, to commit “terrorist acts” in
Kazakhstan.55 There is even speculation that the entire incident was actually
a provocation of the Kazakh government, designed to demonstrate to the
population that there was a Russian threat to Kazakhstan’s sovereignty.56
The Ust-Kamenogorsk arrests did provoke a Russian response, but a
measured one, in which locally based Russian diplomats sought to intercede
to ensure that the rights of those arrested were not violated. Similarly, dur-
ing their trial there were calls for the extradition of the prisoners to Russia,
but there was little or no consequence when these calls were not heeded. Yet
even these muted responses may represent enough hope to encourage fringe
groups like the one in Ust-Kamenogorsk to form.
It is always hard to know whether an act is a provocation, and by whom.
In the current political environment of Kazakhstan, however, it would be a
waste of political capital to advocate secession because, in the absence of
strong support from powerful political groupings within the Russian Fed-
eration, there is no likelihood that interstate border changes can occur.
Although the Russian government has recognized Kazakhstan’s borders,
there is always the possibility that the position of the Russian government
will change. As long as this hope exists, many Russians in Kazakhstan still
see reunification with Russia as inevitable, even after the move of the capi-
tal to the northern city of Akmola (now Astana) in late 1997 and the reor-
ganization of several northern oblasts.

Accepting Citizenship

The nature of the Kazakh state, like its boundaries, is becoming more fixed
with time. As in the Soviet era, the national identity is still shaping the
political perceptions of Kazakhstan’s population, stimulated by a state-build-
ing strategy that reinforces the idea that Kazakhs are finally the masters of
their homeland. While Kazakhs may be critical of economic or political
policies, they are at peace with their past and able to honor their ancestors.
Kazakhs place great importance on historic continuity and the relation
between people and their land (in a communal sense). Now for the first time
in hundreds of years, this relation has been righted.
The same cannot be said for most of the country’s other ethnic commu-
nities. The choices facing Kazakhstan’s Russians, in particular, appear
increasingly stark. They can either remain in a country where they have
Martha Brill Olcott | 81

decreasing political loyalty in the hope of achieving some economic bene-
fit, or they can move back to Russia and take their chances economically.
Ethnic Russians believe themselves to be more disadvantaged than
Kazakhs. A study done in 1994 found that only 5 percent of the Russians
questioned felt that they live better than the Kazakhs, down from 12 per-
cent in 1991.57 A full 88 percent of the Russians reported that life had been
better for them under the old system.58 Russian dissatisfaction is increasing,
and the pace of emigration from Kazakhstan picked up in the last half of the
1990s, although property in Kazakhstan had become harder to sell and
resettlement in Russia was complicated by that country’s own economic
difficulties. As I detail in chapter 6, although Kazakhstan has suffered a
large numeric and proportional loss of Russians, that still leaves about three-
fourths of Kazakhstan’s Russians who are trying to accommodate them-
selves to life in a Kazakh-dominated republic.
To be fair, the Kazakhs also complain of the declining quality of their
lives. Interestingly enough, their sense of discontent seems to be greatest
when they live in more mono-ethnic or Kazakh-dominated regions, such as
southern Kazakhstan. Admittedly, these are some of the poorest areas of the
country, but it may be that those Kazakhs who live in more multinational
areas have a greater sense of increased entitlement. In general, the Kazakhs
seem less pessimistic than do the ethnic Russians. 59
Ironically, it is unclear whether the government is as concerned over the
consequences of Kazakh discontent as it is over Russian unhappiness,
largely because the Kazakhs have no foreign power to take up their cause.
For example, in late 1997 the ethnic Kazakh-dominated strike movement
in Kentau was allowed to gain momentum for several weeks before the
government agreed to pay back wages, even after there were reports of sev-
eral deaths linked indirectly to the strikers’ protest march on the capital.
It is hard to imagine that the government would have dealt with Russian
strikers as callously. The Russian media—and especially ORT, the second
most frequently cited source of news in Kazakhstan60 after Kazakhstan’s
own Khabar television station—did report on the Kentau strikes as well
as the earlier labor unrest in Karaganda, albeit quite differently. The cov-
erage of strikes by the predominantly Russian work force was designed to
evoke sympathy for unpaid and unfairly treated employees, while footage
from Kentau highlighted the incompetence—and even venality—of the
Kazakh government, which was neglecting its own workers, not just the
Russians.
82 | The Challenge of Creating Kazakhstanis

However, unlike the Russian population, the Kazakhs do not perceive
that their future economic prospects are shaped by nationality. Soviet-era
educational advantages brought local Russians the very industrial jobs that
are being eliminated. Politically well-connected Kazakh families dominate
the new economy, placing the Russians at a disadvantage. Even those rare
Russians who do know Kazakh still inevitably find themselves outside the
family and the subethnic bonds that increasingly dominate Kazakhstan’s
economic culture.
Ethnic Kazakhs who were educated in Russian suffer from the same sense
of a constricting cultural universe, but they do not feel politically disen-
franchised. When surveyed, Russians tend to express confidence that the
republic’s ethnic problems are solvable and to characterize their attitudes
toward their Kazakh fellow citizens as generally favorable, more frequently
than the Kazakhs make similar claims of ethnic Russians. This willingness
to share the republic, however, appears to be based upon the expectation
that they will be able to live in the linguistic and cultural environment to
which they are already accustomed.
To many of the Kazakhs, such parity too closely resembles the much-
bruited “multinationalism” of the Soviet era, which disguised a genuine
Russian dominance. Truly exclusionist nationalism is rare among the
Kazakhs. Even the groups that are considered extremist, such as Alash and
Azat, speak only of consolidating the primacy of Kazakh language and, in
the case of Alash, of Islam. There has never been formal public pressure to
push Russians out of the republic. At the same time, though, the country’s
leaders are quick to quash plans that might erode Kazakh dominance. The
language question is one example of an issue on which even pro-Russian
Kazakh leaders seem determined to bend but not break. Another such issue
is the firm rejection of anything that smacks of federalism, which in the
Kazakh political lexicon becomes a near synonym of eventual separatism.
From the beginning, Kazakhstan’s leadership rejected the idea of intro-
ducing a federal system in the republic, opting immediately for a unitary
state. Before independence Russia was a federation; Kazakhstan was not
and had no autonomous republics or oblasts within its borders. Although
there has been lengthy discussion of turning the country into a federative
state, especially among the Russian political activists, the Nazarbayev gov-
ernment has rejected this, fearing that federalism would unnecessarily dilute
central authority and foster secession. This decision, as we will see, was
made by people who had little idea about the varieties of federalism or
Martha Brill Olcott | 83

about the role that power-sharing relationships can play in creating politi-
cal legitimacy.
The government has also quietly supported efforts to shift the republic’s
ethnic balances, with a goal of establishing Kazakh majorities in the north-
ern oblasts. Efforts such as the repatriation of Kazakhs from Mongolia and
China proved both expensive and unnecessarily inflammatory. Less obvi-
ous encouragement to native Kazakhs to move northward has led to pro-
nounced shifts in local demographic balances throughout the country (see
chapter 6).
It is probably this dynamic that most affects the varying perceptions of
the two populations about the republic. When surveyed, both Russians and
Kazakhs tended to say in equal numbers that their primary allegiances were
to their places of immediate residence and to their jobs or occupations. Yet
the two populations differed sharply in their expressions of allegiance to
Kazakhstan as a state. In a 1995 survey nearly 40 percent of the Kazakhs
listed the state as among their three primary loyalties, whereas only 25 per-
cent of the Russians did so.61
The presence, and initial near parity, of the two huge populations in the
republic usually obscures the fact that Kazakhstan is home to many other
nationalities. Some of these groups, such as the Belarusans (1.1 percent of
the population in 1992) and Ukrainians (5.3 percent), have much in com-
mon with the local Russians, including that they are leaving the country. The
republic’s Uzbeks (2.1 percent) and Azerbaijanis (about 1 percent) also have
homelands elsewhere, but representatives of these two groups seem to be
moving into the republic, not out, probably because of the better economic
opportunities in Kazakhstan.62
The country’s Uzbek population, located primarily in southern
Kazakhstan and also in Zhambyl oblast, occupies an economic position that
is far more prominent than their numerical proportion would suggest. In
fact, many see them as dominating the private sector in this part of the
country. The Uzbeks, however, are not pushing for political influence and
are content to accept the linguistic and cultural domination of the Kazakhs.
This population is largely trilingual (Uzbek, Kazakh, and Russian), and
until 1999 it was quite easy for them to cross the border. Since then tensions
between Uzbekistan and Kazakhstan have increased because the Uzbeks
have been seizing territory purported to be Kazakh territory as they fortify
their border, giving rise to protests and unease in southern Kazakhstan.63
The interethnic tensions caused by these border disputes, which have
84 | The Challenge of Creating Kazakhstanis

turned violent at times, have been contained to the localities affected, and
the two states are moving toward final delineation.
Kazakhstan’s Jews are also a small but disproportionately influential
group, composed of the descendants of wartime evacuees or of people who
sought quieter backwaters in Soviet times. Jews are leaving for Israel and the
United States and are moving to Russia and Ukraine, but the reinvestment
of Jewish capital is sufficient for Kazakhstan to maintain formal and cordial
relations with Israel.
Germans constituted 5.8 percent of Kazakhstan’s population in 1989. 64
They are the descendants of settlers originally enticed to the Volga region in
the eighteenth century by fellow German Catherine the Great. More recently
their ancestors were exiled to Kazakhstan by Stalin during World War II.
They began leaving the country for repatriation in Germany in the late
1980s, and by 1992 they accounted for only 4.7 percent of Kazakhstan’s
population. In the wake of German reunification, the Bonn government’s
enthusiasm for absorbing these distant relatives waned, and good ties
between Kazakhstan and Germany led to economic assistance from the lat-
ter to fund projects of the local Germans. The Germans, however, have con-
tinued to leave, with the German government continuing to provide formal
reabsorption assistance. The size of Kazakhstan’s German population has
dropped to roughly one-third the 1989 figure.65 The country’s senior Ger-
man, then Akmola oblast akim (governor) Andrei Braun, the head of the
region of Kazakhstan in which the Germans were densely concentrated,
was interviewed to offer reassurance.66 Instead of calming the situation, the
interview led to some embarrassing admissions. It turned out that Braun’s
daughter and grandchildren were living in Germany, and when asked
whether he himself had plans to relocate there, the Akmola governor joked
that job prospects for former senior Kazakh political appointees were not
reported to be very favorable.
There are large numbers of Chechens and Tatars (about 1 percent in
1992, including both Volga and Crimean Tatars) in Kazakhstan. Both the
Crimean Tatars and the Chechens are the descendants of peoples expelled
from their homelands by Stalin after World War II. Disputes between Rus-
sia and Ukraine over ownership of Crimea make it highly unlikely that
these Tatars will be able to press a claim for their homeland any time soon,
while Kazakhstan’s Volga Tatars are often descendants of families who have
lived on the Kazakh steppe for centuries.
Martha Brill Olcott | 85

The nature of Chechnya’s political status remains a point of bloody con-
tention, and fighting between the Chechens and Russians has been a cause
for Kazakh nervousness. The Kazakh government has never endorsed the
Chechen cause. At the time of the first war, 1994–1996, the Kazakhs were
uncomfortable about the precedent that a successful secession would give
to groups within their own country. By the time of the second conflict,
1999–2000, their opposition to the Chechen cause was stronger still. They
were now very concerned about the potential contagion from armed or ter-
rorist groups that had enjoyed safe haven in Chechnya.
Even more ticklish is the situation of the Uighurs, whose only homeland,
if it exists, is in the (eponymous) autonomous region of China. Although not
especially numerous in Kazakhstan (slightly under 1 percent in 1992), the
Uighurs’ presence is significant in Kazakhstan as well as in Kyrgyzstan and
Uzbekistan. While better assimilated into their places of residence, the
Uighurs nevertheless resemble the Kurds in that they see themselves as the
heirs of a historical nation that now lies buried beneath several other states.
Since the largest group of Uighurs lives in China, where they sporadically
and violently press for greater autonomy, this population worries all the
leaders of Central Asia. Kazakhstan has been particularly anxious to forestall
any appearance of sympathy for Uighur nationalist aspirations because its
border with China is Central Asia’s longest, and the number of Chinese
troops stationed near the Kazakh border is three times the size of
Kazakhstan’s entire army.67 Each time that there has been ethnic-inspired
unrest in neighboring Xinjiang province, local Uighurs have tried to find a
forum in Kazakhstan to air their grievances and have regularly protested the
presence of visiting Chinese dignitaries. The most severe Uighur protests
occurred in February 1997 after a wave of riots left as many as one hundred
dead. Since then there have been several demonstrations in Almaty against
the Chinese repression of Uighur separatists.68
In short, Kazakhstan is going to face problems created by the multina-
tional nature of its population far into the future. Long after the Kazakhs
have emerged as the dominating majority in the country, Kazakhstan will
remain the home of a huge and disparate minority community. Minority
constituencies, though, will share little other than the common awareness
that they are not Kazakh. Coping with the large Russian population has
tended to present the discussion of multi-ethnicity in Kazakhstan as a kind
of zero-sum problem: if there is no language law asserting the primacy of
86 | The Challenge of Creating Kazakhstanis

Kazakh, then the Russian language will dominate; if better regional repre-
sentation is permitted, then Russian separatism will develop in the north; if
the Kazakhs do not promote their kin, fellow hordesmen, and co-nationals
for jobs and places in the university, then the Russians will reassume their
former economic and political control.
While Russians are likely to remain Kazakhstan’s largest single minority
for long into the future, the dynamics of demographic change seem certain
to reduce their importance. The diminution of ethnic Russians’ influence,
however, and of the historically peculiar challenges and fears that they evoke
among the Kazakhs, will still not automatically create a country in which
ethnicity and patriotism are easily linked. While Kazakhstan is certain to
become a state in which the Kazakh language and culture predominate, its
leaders must still find ways to stimulate a sense of belonging and citizenship
among the enormous minority of its people who are not Kazakh but who
live and work in the republic. The government does not yet feel secure in
its ability to meet this challenge, and this insecurity is making it more ner-
vous about placing its fate in the hands of the people before whom it is sup-
posed to be accountable.
4

Trying Pluralism and Abandoning It

resident Nazarbayev quickly became frightened by the prospect of not
P being able to predict outcomes, which is an inescapable feature of a
democratic system. As former Communists, he and his advisers were aware
of how public opinion could be manipulated, but as they began to experi-
ment with political reforms they quickly learned how difficult it was to
shape public will. In a democracy, incumbents can be turned out of office,
and Communist-leaders-turned-presidents have sometimes fared poorly
when facing their newly independent electorate. President Nazarbayev
found this risk unacceptable and was unwilling to accept the legislative
rebuffs inherent in a democratically and popularly elected parliament.
After a few years of trying to keep pace with political changes in Russia,
the Kazakhs began to back away from the idea of establishing even a quasi-
pluralistic system. As a result, over the past ten years the arenas of political
contestation in Kazakhstan have grown more limited in number and more
restricted in scope. The parliament has been stripped of power; the media,
although partially privatized, has come under tighter government control;
local governments have been kept from becoming effective sources of polit-
ical challenge; and it has become increasingly difficult for those who object
to these changes to organize themselves into effective opposition parties.
Nazarbayev began a seemingly irreversible course in March 1995 when
he dissolved the parliament, ruled by decree for nine months, and extended
his rule to 2000 by use of referendum. The current constitution dates from
August 1995, when it was also adopted by referendum. It further strength-
ened Kazakhstan’s presidential system. The president gained the right to
87
88 | Trying Pluralism and Abandoning It

petition for delegated legislative powers for a term not exceeding one year,
providing that two-thirds of the deputies at the joint session of parliament
concurred. The current constitution reaffirmed the right of the president to
appoint government and regional leaders and to dissolve parliament if it
passed a vote of no-confidence in the government or twice rejected a pres-
ident’s nominee for prime minister. It provided for a weak bicameral legis-
lature with an upper house (the Senate) dominated by presidential
appointees. This remains the case today, even after the constitutional mod-
ifications of 1998.
The government is also a creation of the president. He appoints the prime
minister, who presides over a cabinet that has been streamlined during the
past few years. In the name of government efficiency, a goal pressed on
Kazakhstan by international financial institutions, this streamlining has
made the cabinet little more than a conduit for policies originating in the
presidential administration. Although the administration has been trimmed,
made more professional, and had its power enhanced, a glass ceiling keeps
all save those in the president’s immediate circle from rising to the very top.
The president has the right to annul or suspend the decrees of government
and the governors of oblasts and major cities. Further, the constitutional
amendments of October 1998 freed the president from the requirement to
submit international treaties to parliament for approval.
Interested in courting favor and investment from the West, the Kazakh
president has been more concerned with explaining away his behavior than
in modifying it. Thus, before the January 1999 presidential elections, a
series of one-page advertisements were placed in prominent U.S. newspa-
pers explaining the various accomplishments of independent Kazakhstan,
including its political ones. These ads appeared at the very time the United
States and the OSCE were having little success in pressuring Nazarbayev and
his advisers to conduct the elections according to OSCE norms.
Nazarbayev and his family have a great deal to lose from a competitive
political system. While the president has regularly engaged in well-
publicized campaigns against corruption, they have never resulted in the
dismissal or prosecution of family members or those in political favor. In
fact, the economic influence of President Nazarbayev and his extended fam-
ily is steadily growing. The family is said to hold millions—and possibly bil-
lions—of dollars of assets in foreign accounts, partially obtained from
Western oil companies as signing bonuses. Nazarbayev has come under
investigation in Switzerland and the United States, and his political oppo-
Martha Brill Olcott | 89

nents have made scores of purportedly official documents available to cor-
roborate the charges.1 Some even claim that Nursultan Nazarbayev is one of
the ten richest men in the world.2
Kazakhstan’s leader maintains that as Asians the Kazakhs are not dis-
posed by history or culture to be democratic and that popular rule could
empower nationalist demagogues, secessionists, communists, or Islamic
radicals and put the future of the nation—not to mention economic
reform—at risk. As the region has become manifestly more unstable, this
argument is becoming deeply rooted among the Kazakh elite and has begun
to appeal to Western audiences as well.
Kazakhstan’s people have little experience with the responsibilities of cit-
izenship in a democratic society, but it is hard to know how essential a pop-
ulation’s historical consciousness is to a successful democratization effort.
The desire to live in a democratic society is more important than the legacy
of having done so. A number of Central European states that lack historical
precedents are evolving in democratic ways. In 1989 and 1990, the Kazakhs
participated in a process of popular empowerment triggered by Gorbachev’s
reforms. After gaining independence, however, the Kazakh ruling elite began
to back away from those policies. Popular support for democratization
efforts did not wither, but the defenders of the efforts were neither suffi-
ciently numerous nor vocal to convince a reluctant elite to support demo-
cratic change.
Democratically inclined elites can move a more reluctant population
toward political change, but an elite that is more conservative than its pop-
ulation will put the nation’s stability at risk. In this period of nominal pop-
ular empowerment, Kazakhstan’s elite must keep the public minimally
satisfied, but it is also succumbing to the temptations of office, with few
public safeguards in place. Having made it impossible to be voted out of
office, Kazakhstan’s leaders face the risk that the people will take to the
streets instead.

Experimenting with Political Participation

During the last years of Soviet rule, the USSR became a veritable laboratory
of political experimentation as Soviet party leader Mikhail Gorbachev tried
to find ways to stimulate popular involvement in the country’s political life
to create the appearance of popular empowerment without subjecting the
90 | Trying Pluralism and Abandoning It

government to risks. A critical part of this effort was the 1988 decision to
permit the formation of so-called informal groups to take the pressure off the
Communist Party, which until that time was the sponsoring organization for
all legally sanctioned political and social organizations in the USSR. Like so
much else that was tried in the late Soviet years, this action had much the
opposite effect. Environmental groups, language societies, and commemo-
rative history groups—all acceptable categories for organizations in the
Gorbachev scheme—became forums for nationalists and even pro-
independence forces. Although Kazakhstan did not have any formal sepa-
ratist or independence movements, several of the informal groups that were
organized along ethnic or national lines were effectively nationalist proto-
parties. Ethnic Kazakhs organized Alash, Azat (Freedom), and Zheltoksan
(December),3 while the Russians founded Yedinstvo (Unity) and Vozrozh-
denie (Renaissance), a Cossack organization.
Yet none of these groups attracted nearly as much support as did Nevada-
Semipalatinsk, a mass movement that genuinely cut across ethnic lines and
distinguished Kazakhstan. The antinuclear movement Semipalatinsk, soon
renamed Nevada-Semipalatinsk, was founded by Olzhas Suleimenov in
1989 in an attempt to halt Soviet nuclear testing in the northeastern region
of Semipalatinsk.4 Encouraged by this organization, more than a million
people, both Russian and Kazakh, signed petitions demanding a test ban on
Kazakhstan’s territory, and huge crowds turned out for this group’s rallies in
protest of decades of ecological and human degradation.
After forty years of testing equal to the explosion of 20,000 Hiroshima
bombs, the situation in the region was dire. According to the Kazakh Min-
istry of Health, human birth defect levels in the region were at least six and
a half times the Soviet average, mental retardation and diseases of the ner-
vous system were two and a half times greater, and cancer rates were sig-
nificantly higher.5 Local people described cases of deformed newborn
livestock (such as sheep with three legs or only one eye), and stories circu-
lated that babies were also being born grotesquely deformed.
While the tragedies inflicted on the Kazakhs by nuclear testing were real,
the decision to channel the political energies of Kazakhstan’s population
toward this kind of activism was not the product of a grassroots initiative.
The origins and financial support were murky. Even though Suleimenov
liked to cast himself as an opposition figure—and he was clearly the enfant
terrible of the Kunayev-era Communist Party—he was an establishment fig-
ure of the late Gorbachev period, an active Communist Party member who
Martha Brill Olcott | 91

enjoyed Gorbachev’s favor, and had the privileges usually accorded a Cen-
tral Committee member.6 Whether the formation of the movement was
solely Suleimenov’s idea—as he repeatedly claims in personal interviews—
is hard to know, but in the long run, the existence of Nevada-Semipalatinsk
worked to the benefit of both Mikhail Gorbachev and Nursultan
Nazarbayev.
From Gorbachev’s point of view, Nevada-Semipalatinsk was a potent
instrument in his campaign against the further deployment of nuclear
weapons and fit in well in his “nuclear free world by 2000” campaign.
Gorbachev was also shopping for a potential successor for Nazarbayev,
should the latter falter during what were very unpredictable times. Georgia,
Azerbaijan, and Tajikistan all had violent disturbances directed against the
Communist Party, in addition to politically crippling but peaceful demon-
strations in the three Baltic republics. Nevada-Semipalatinsk transformed
Suleimenov into a prominent political figure who would be acceptable to a
broad spectrum of Kazakhs as well as be loyal to Moscow.
Nazarbayev had taken over for the unpopular Kolbin in June 1989 and
needed little help in emerging as a strong and well-respected leader. This
could not have been predicted, since the Kazakhs might easily have turned
on him for being part of Kolbin’s “team” and for his tacit support in ousting
party boss Kunayev. Instead, a strong rivalry developed between Nazarbayev
and Suleimenov, with the latter serving as a useful gadfly—the leader of the
house opposition—for several years. When Suleimenov’s lingering presi-
dential ambitions became too burdensome in 1995, he was appointed as
Kazakhstan’s first ambassador to Italy,7 but not before he had purportedly
benefited handsomely, borrowing the membership dues of Nevada-
Semipalatinsk to engage in commercial transactions.8
The Nevada-Semipalatinsk movement, though, was far less troublesome
than its leader and came to personify the defense of the well-being of the
Kazakh people and their homeland. Thus it was Nevada-Semipalatinsk,
and not one of the less predictable informal groups, that was able to serve
Nazarbayev in a hectic maneuvering to define and enlarge the republic’s eco-
nomic sovereignty. A kind of protoparty, it also absorbed popular energies
that might have otherwise gone to forming alternative political parties.
Kolbin’s purge of the Kazakh elite during his two and a half years in
power also reduced the arena of political competition in Kazakhstan. Dur-
ing 1987 and 1988, when the intellectuals in other Soviet republics (which
had experienced their purges three or four years earlier) were forging ahead
92 | Trying Pluralism and Abandoning It

to independence from the center, the Kazakh elite was preceding more cau-
tiously because those with party backgrounds were often vulnerable to
attack for prior associations with Kunayev. In 1990, therefore, when
Kazakhstan elected its first Supreme Soviet on a semicompetitive basis since
the mid-1920s, the Communist Party was still the republic’s only function-
ing political party and Kazakhstan one of the few places where a quarter of
the seats in the legislature were reserved for candidates chosen by the Com-
munist Party or by its affiliated organizations.9
Those elections were part of Gorbachev’s campaign to bolster the sagging
political legitimacy of the Soviet system. In many republics they proved to
be an enormous tactical blunder because independence-minded legislators
swept Communists and unionists from their seats, creating new, republic-
level parliaments whose agendas were to separate their republics from
Moscow, or at best to sharply reduce Moscow’s influence. By contrast,
Kazakhstan’s elections had few surprise outcomes and produced a fairly
predictable legislature.10 All but a handful of the deputies were Communist
Party members, and none of the republic’s informal organizations ran blocs
of candidates, most likely because they did not want to put their legal sta-
tus at risk. The parliament was also disproportionately Kazakh, reflecting the
growing organizational strength of the Kazakh-dominated republic Com-
munist Party. Kazakhstan’s elite had begun to realize that Moscow’s power
was receding, but the masses were now expected to ratify their governors’
choices.
The ruling elite and the legislators they helped to empower represented
a single political universe. After independence was achieved, however, the
legislature began to see itself as having a political mandate that was inde-
pendent of the president and his government. The tension grew so great that
Nazarbayev eventually suspended this body. The dissolution of the Com-
munist Party added to the growing complexity of Kazakhstan’s political
scene. After the failed August 1991 coup, the governing class of Kazakhstan
no longer had a single corporate interest. The privatization process, in par-
ticular, was creating substantial rifts within the elite and provided oppor-
tunities for unsanctioned individuals and groups to become political
claimants.
The patronage of the Kazakh president was seemingly limitless, given the
wealth of the country that was at his disposal, but those who lacked personal
ties to the Kazakh leader were also freer to follow their own political
instincts. Increasingly, the old nomenklatura elite—which was, after all, the
Martha Brill Olcott | 93

group principally represented in the legislature—began to divide into those
who felt advantaged by the new political and economic world and those
who did not.
Initially the legislature was united, and one of its first actions was to
name the Kazakh Communist Party first secretary to the newly created office
of republic president, a title confirmed through popular election in Decem-
ber 1991 when Nazarbayev received 98 percent of the popular vote.11
Although Nazarbayev ran unopposed in the 1991 race, that election intro-
duced the principle that leaders derive their powers from the people they
lead. Legislatures could reject their leaders, as the Kyrgyz had done in Octo-
ber 1990 when dark horse candidate Askar Akayev was chosen over party
First Secretary Absamat Masaliyev. The specter of being unseated in a free
and fair election has haunted Nursultan Nazarbayev for more than a decade.
As President Nazarbayev gained new powers, which he used in the leg-
islative struggle to define Kazakhstan’s sovereignty, the parliament’s first
experience with coalition politics and political consensus building began. In
summer 1990 the Democratic Bloc, a group of 100 legislators, issued a
more extreme statement of sovereignty than Nazarbayev wished to endorse,
leading to the government sponsorship of a slightly larger bloc, the Com-
munist Faction, to ensure passage of the preferred text.
The presidential control of parliament became more difficult after the
August 1991 coup and the dissolution of the Communist Party. Nazarbayev
therefore tried to create a presidential party to be the functional equivalent
of the banned CPSU. Nazarbayev and his supporters, though, quickly lost
control of the first two parties that were founded: the Socialist Party, created
in August 1991 to inherit the property and membership of the Kazakhstan
Communist Party, and the Congress Party, which followed in October 1991
and was headed by Kazakh poets Suleimenov and Mukhtar Shakhanov.
In October 1992, when Suleimenov was becoming a potential political rival,
Nazarbayev sponsored the creation of the Union of People’s Unity (SNEK—
later renamed the People’s Unity Party, or PNEK), which proved more com-
pliant but equally ineffective in mobilizing popular support. Although it
occupied a diminishing role in public life, PNEK was not fully abandoned
until March 1999 when former Prime Minister Tereshchenko formed the
Otan (Fatherland) party to advance the presidential choices in the then-
upcoming legislative elections.12
The stimulation of political party development is proving to be a slow
process in even the most democratic of the postcommunist states. It is still
94 | Trying Pluralism and Abandoning It

less successful in places like Kazakhstan, where the playing field is not a
level one, where legal roadblocks are placed before all but proregime groups,
and where political participation does not really influence political out-
comes.13
While Kazakh law provides for the creation of independent political par-
ties, there is nothing in the political environment of Kazakhstan to stimu-
late their development. According to a 1997 poll, more than 40 percent of
the population showed distrust of and apathy toward political parties.14
Such polling results reflect the popular fatigue with living in the highly ide-
ological environment of a single-party society, where the executive has used
the vertically integrated nationwide party structure to link the government
directly to the people.
From its formation, the presidential party has lacked an intellectual orga-
nizing principle. While the presidential apparat has drafted several concept
statements on the nature of the new national ideology, it has never suc-
ceeded in making them sound like anything more than platitudes about
such generally shared humanistic ideals as ethnic tolerance, the social and
spiritual well-being of all citizens, combined with a vague endorsement of
economic and political reform.
By contrast, the CPSU was an ideological party, and everyone knew what
is stood for. Even after the support for the party’s ideals began to diminish
substantially, people of all ethnic backgrounds, including some Kazakhs of
the younger generation, continued to support its program. There are more
than fifty-five thousand members of the reconstituted Communist Party
scattered throughout the country, drawn mainly from the scientific intelli-
gentsia, civil servants, workers, and pensioners.15 Most observers believe
that if the votes in the 1999 parliamentary election had been tallied honestly,
the Communists would have taken more seats on party-list balloting than
any other group. As it was, they received 17.8 percent of the party-list vote,
compared to 30.5 percent for the presidential party, Otan.16
Despite the massive amounts of money pumped into promoting their
activities, the lack of popular interest has ensured that these parties will
never became mass organizations. Aggravating the problem is the size of
Kazakhstan’s elite base. There were not enough talented people willing to
work as bureaucrats to staff competently the senior administration in the
ministries, oblasts, cities, and districts or to organize party branches in every
locality, especially since talented young people were being drawn into the
country’s new economy.
Martha Brill Olcott | 95

These problems only magnified the difficulties encountered when the
presidential apparatus sought to overcome the lack of public support for a
single presidential party by stage-managing the creation of a multiparty sys-
tem, sponsoring the creation of a variety of proregime parties, each designed
to appeal to its own group of voters. These include the Civil Party, formed
in November 1998, and the Agrarian party, formed in January 1999, to
appeal to entrepreneurs in business and industry and to proponents of pri-
vate property in agriculture, respectively.17 These have little more support
than the mass patriotic parties do. None of these parties is designed to serve
as a civic training ground by identifying and nurturing potential elites, nor
are they used to help the government deliver goods and services to the
community.
Opposition parties have done little better in filling these roles. Certainly
it is true that the current political system limits their ability to contest seats
in the parliamentary election successfully,18 and some of the nationalist par-
ties are further hampered by their weak financial bases. Yet a lack of cadre
and the low level of public interest are far more devastating to political
party development in Kazakhstan than are the financial problems that the
independent political parties often face. For even in cases where there seems
to be ample money, such as was true of the RNPK (Republican People’s
Party of Kazakhstan) organized in 1999 by former prime minister Akezhan
Kazhegeldin,19 public apathy has proved hard to surmount, and it has been
difficult to attract elite support. Political patronage is so fully controlled by
the office of the president that those who seek to create an independent
political power base have little to offer to attract support.
Even when political life in the country was at its freest, in the early 1990s,
Kazakhstan was moving toward a kind of managed democracy, where the
ruling elite set strict barriers on those engaged in independent political
actions. Over time, President Nazarbayev and his close supporters have
grown more fearful of the vagaries of political control that are associated
with grassroots political parties and voluntary political organizations, not to
mention those that result from a competitive political party system. This atti-
tude has fostered structural obstacles—including restrictions on freedom of
the press and speech as well as the reduced role of parliament—that ensure
that antiregime groups will have trouble in mobilizing public support. The
constraints make it impossible for independent local nongovernmental orga-
nizations (NGOs) to attract a broad membership. What little NGO pressure
existed came from organizations with international support.20 Nonetheless,
96 | Trying Pluralism and Abandoning It

formal institutional and informal individual pockets of opposition persist in
the country, despite official efforts to define how Kazakhstan develops as a
strong unitary state.

Defining the Unitary State

Kazakhstan’s first constitution was adopted on January 28, 1993, and largely
legitimated the continuation of the Soviet-era political arrangements.
Although modified a number of times and completely replaced in 1995, the
first constitution invested the greatest part of the republic’s political power
in the office of the president, where it remains. That power was strengthened
by the declaration of Kazakhstan as a unitary state, with republic interests
placed above regional ones. The constitution also established Kazakhstan as
a secular state and forbade the president to be even a member of a “public
organization,” including any political party.
The first constitution formally divided the government into three
branches: the executive, represented by the large presidential staff; the leg-
islative, represented by the then-unicameral Majilis (Kazakh Supreme Coun-
cil), whose representatives were elected on a territorial basis; and the
judiciary. The president himself, while a part of the executive branch, was
also assigned a supersystemic role, charged with ensuring the proper func-
tioning of all three branches.
The president was also given decisive control over the local government,
because although representatives were elected to the local councils man-
dated for each of the republic’s (then) nineteen oblasts, the councils were
made subordinate to the oblast governor (an akim or glav), who was a pres-
idential appointee. These akims would name their subordinates as depart-
ment heads. The oblasts are further subdivided into raions, most of which
have several points of settlement. Each of the oblasts and raions, and most
of the settlement points, including all the cities (many of which are further
subdivided into urban raions), also have their own elected council, called a
maslikhat. These are charged with administering local services, for which
they are given budgeting powers, and very limited powers of local taxation.21
The 1993 constitution gave local governments a narrow range of activi-
ties in which they had independent authority. They were intended to be a
conduit in a vertically integrated hierarchy, managing the economy in the
days before privatization while supervising tax collection to the center, and
Martha Brill Olcott | 97

paying social welfare benefits to the population. These functions were all
those of the old Soviet oblast.22 With time, the system of local administra-
tion was modified, and the oblasts have been given expanded rights of tax-
ation and additional discretionary authority to pursue economic
investments. In addition, the second (1995) constitution gave a more well-
defined description of the duties of local government.
While the 1993 constitution stipulated that local authorities were respon-
sible for “the resolution of all questions of local significance” and the “ful-
fillment of the constitution, laws, and acts of the President and his
administration,” the 1995 constitution listed a range of activities to be pur-
sued by local authorities.23 The powers of the maslikhat, however, may be
terminated by the Senate.24 The Kazakhs recognized, though, that the
authority of the local governments could be better elaborated and their
capacity to discharge their responsibilities could be improved—both goals
that U.S. Agency for International Development (USAID) and UN Devel-
opment Program (UNDP) assistance programs were working with the
Kazakhs to address.
The growing professionalization of local government was not intended to
shift the balance of power in the country since President Nazarbayev and his
advisers remain concerned over the risks associated with regional differen-
tiation.25 From the beginning, Nazarbayev has been reluctant to take any
measures that would increase local autonomy, recognizing that Kazakhstan
is, after all, an enormous country, one whose constituent units, shaped by
their varying ethnic and economic situations, are likely to understand their
needs and potentials in distinct ways.
Nazarbayev’s fear of local autonomy is deep-rooted. The early years of
independence were a period in which the centrifugal forces that helped
bring about the collapse of the Soviet Union seemed to be still very much
in evidence, especially in neighboring Russia. Although none of
Kazakhstan’s regions gave any indication that it might really resist Kazakh
central government authority, Nazarbayev felt that the Kazakh state had to
develop institutions that would counter those forces rather than reinforce
them. He believed that a federal system would make oblasts the implicit
enemy of the state and would doom the center to be little more than an
arbiter of competing regional interests.
The choice of a unitary state has left Kazakhstan’s oblasts dependent on
the center to respond to specific local economic and social conditions, but
as we see in chapter 6, it did little to guarantee that the national authorities
98 | Trying Pluralism and Abandoning It

would be competent to deal with them. The hardships of the transition
period, combined with the institutional decisions made, guarantee that the
tension between center and periphery will certainly continue for the fore-
seeable future because the richest and the poorest regions alike feel thwarted
in their desires to serve local residents well.
Kazakhstan could easily have evolved into a system, even a unitary one,
in which there was great variation in how local power was exercised. At the
time of independence, most of Kazakhstan’s population lived in border
oblasts, with which it typically enjoyed close economic and political ties.26
The country’s main regions, the north, the west, the south, the southeast,
and the center of the country were all distinct and, usually at least, an
overnight train ride away from one another. After independence, most
oblasts tried to keep their cross-border ties and did so with the support of
the center, which had limited resources to contribute to stimulating employ-
ment and ensuring access to food and communal services in the periphery.
Except on a formal level, however, the center did not facilitate border ties.
The most-well-organized connections were along the Kazakh-Russian
border. In 1993, the Interstate Association of Contiguous Territories of Rus-
sia and Kazakhstan was formed to maintain and manage cross-border eco-
nomic and infrastructural ties.27 The Kazakh government did not feel
directly threatened by this, because for all the talk of Russia possibly implod-
ing during those years, there was little evidence that the Siberian oblasts
could organize themselves into an effective regional association, let alone
form an independent state. There was also little prospect that the northern
oblasts of Kazakhstan would unify.28 The oblast administrators and Russian
nationalist groups alike remained focused on their respective geographic
areas, in large part the product of how the transport system was laid out. As
I discuss later, although the Kazakh government has begun various highway
and railroad bypass projects to connect the Kazakh oblasts better, these
links continue to be through Russia.
When the broader regional initiative began to fail, a number of Russian
oblasts sought to strengthen their bilateral ties with their Kazakh counter-
parts but found the unitary nature of the Kazakh state to be inhibiting. An
example is the case of Orenburg, located just over the border, in Russia.
Orenburg was the site of the gas-condensate plants that traditionally
processed output from the Karachaganak field in western Kazakhstan. Oren-
burg firmly sought cross-border ties with its neighbors to the south, and in
June 1997 the heads of Orenburg, West Kazakhstan, and Aktiubinsk signed
Martha Brill Olcott | 99

an agreement on cooperation in protecting the environment and in com-
bating common states of emergency. Little came of these efforts, however,
and close cooperative relationships between officials in the two oblasts are
more the exception than the rule.29
Cross-border ties have been difficult to maintain in southern Kazakhstan
as well. In the early years strong informal relations persisted, bolstered by
the creation of a Central Asian Economic Community in 1994. However,
Kazakhstan, Kyrgyzstan, and Uzbekistan have all pursued protectionist poli-
cies that inhibit trade across borders, with the most profound disruptions
resulting from Uzbekistan closing its borders in 1999.
Kazakhstan’s oblasts nevertheless continue to press for a devolution of
authority, and there has been regular talk of electing governors and mayors,
partly in response to Kazakhstan’s Russian-dominated provinces.
Nazarbayev seriously considered this idea in 1993 when Boris Yeltsin intro-
duced the election of local officials in the Russian Federation. By that time,
Nazarbayev had replaced Moscow-era appointments with governors (and
mayors) who were loyal to him. By transforming these offices into popularly
elected ones, Nazarbayev would have created opportunities for mass polit-
ical involvement at the local level, helping to appease Kazakhstan’s Russian
population without triggering an adverse response from most Kazakhs. It
would, however, have diminished the president’s personal authority and
slowed the process of developing a unitary political culture in the country.
Talk of elected local officials shifted to a vague distant future after the
1995 constitution retained the presidential appointment of all government
officials, adding only the proviso that local councils can express no-
confidence in their akims by a two-thirds majority vote. The president, how-
ever, was under no obligation to honor such a vote, and he can also overturn
decisions taken by the local councils. After Nazarbayev rejected an opposi-
tion proposal that regional governors be elected and not appointed as being
a threat to social and economic stability,30 in May 1999 the Kazakhs held
“experimental” elections for the mayor of Chemolgan, Nazarbayev’s native
town in southern Kazakhstan.31 Those elections led to the short-lived spec-
ulation that the popular election of local executives might be forthcoming, a
speculation that was revived in April 2001 when the Nazarbayev government
promised to hold competitive elections experimentally for one or two rural
district akims in every raion. The restrictions on these elections—that every
candidate must be over the age of twenty-five, have a higher education, and
(most important) not use “regional connections or play the game by tribal,
100 | Trying Pluralism and Abandoning It

ethnic, or religious principles”—promise that there will be a great deal of
official orchestration in these contests.32
Defining the power of local government in Kazakhstan is likely to remain
highly contentious in Kazakhstan well into the future. As Pauline Jones
Luong has persuasively argued, the akims in the resource-rich regions are
managing to enhance their own personal power and discretionary author-
ity largely by gaining concessions from foreign investors who seek to run
successful projects in their regions.33 Yet it is unclear that the incumbents
would benefit from the introduction of direct elections. Even in the
resource-rich regions, popular dissatisfaction is said to be high because of
low government reinvestment rates, and dissatisfaction is even greater in
those regions with a deteriorating industrial infrastructure and little or no
foreign investment. Incumbent local governors might well be saddled with
the blame, especially given the limitations of protest voting in the 1999
parliamentary and presidential elections.
President Nazarbayev is reluctant to limit his control of the regions but
remains unsure of how to maximize it. Kazakhstan had its first major admin-
istrative reform in 1997 when five oblasts were fused with their neighbors.
This was justified as an effort to advance economic efficiency by uniting nat-
ural resource deposits with potential refineries and eliminating the bloated
bureaucracies of the country’s least populated provinces.34 These changes
also increased the proportion of Kazakhs in Russian-dominated regions, a
move designed to yield more Kazakh representatives in local as well as
national legislatures. The reorganization conveniently erased some of
Kazakhstan’s debt since the central government claimed no liability for the
money owed by juridical entities that no longer existed, as Russia’s Roskon-
trakt learned when it sought to collect $50 million in undelivered grain
elevators from Taldy Kurgan.35
In spring 2000 there was further talk of dividing Kazakhstan into five
super regions, one for each of the major economic zones of the country.
Nazarbayev may eventually move in this direction, especially if he can work
out a power-sharing arrangement with the so-called donor oblasts—Atyrau,
Mangistau, and Almaty—whose borders would change. Kazakhstan has a
real need to curb government spending, but there was a hypocritical qual-
ity to the 1997 reorganization, which was done against the backdrop of
creating the new national capital of Astana.
Independence spurred a discussion of moving the nation’s capital from
Almaty (in the extreme southeast) to Akmola (renamed Astana, which
Martha Brill Olcott | 101

means “capital” in Kazakh), a city near the country’s center. The legislature
endorsed this in a July 1994 resolution that was backed by presidential
decree in September 1995, and the move was formally executed in Novem-
ber 1997. The reasons for this move have been hotly debated. The decision
was certainly in part a strategy to root the northern section of the country
firmly under Kazakh control. When the decision was taken, Nazarbayev and
the legislators had little idea of the real costs of such a move, but the pres-
ident clearly understood the potential patronage tied to the construction of
a new capital through the awarding of contracts for construction and the
provision of goods and services. There are also rumors of how the
Nazarbayev family solicited funds for erecting various public buildings and
then shunted some of these corporate donations to off-shore accounts.36
Despite pledges that taxpayers would not have to pay for building the new
capital, they have had to pay the millions of dollars of annual expenses
associated with moving legislators back and forth between the two cities and
housing them while they are in Astana. Although legislators and public offi-
cials are under constant pressure by President Nazarbayev to move to the
new city, few are willing to do so. It is also clear that the hundreds of mil-
lions of dollars collected for the construction of the capital, in a style
designed to make it a worthy international centerpiece, could have been
used for more direct public benefit.
The move to Astana is a good illustration of the current state of political
life in Kazakhstan. It is a decision that few outside the senior ruling circles
seem to have viewed as a good idea, yet a search of the country’s press or
examination of the record of its legislative debate turns up little critical dis-
cussion of it. Despite the enormous cost of the project and scanty popular
support, the change of the capital went ahead because it was something that
the president saw as necessary to demonstrate his authority and attract
international attention to the new Kazakhstan he hopes to build.

The Rise of Legislative Politics and a Vocal Press

It seemed at first that public opinion and legislative politics might help to
define Kazakhstan’s political life. By late 1993, the legislature, whose mem-
bers had political ambitions of their own, was beginning to serve as a mag-
net for growing popular disenchantment with a flailing economy that
sported a 2,500 percent annual inflation rate. Somehow, this popular
102 | Trying Pluralism and Abandoning It

dissatisfaction had yet to stick to the still very popular Kazakh president.
This was a major reason for Nazarbayev choosing to pressure compliant
supporters into a “voluntary” dissolution of the parliament in December
1993, two years before its term ended. Claiming that the old parliament had
been an impediment to economic reform, Nazarbayev had little to fear from
international criticism, for in October 1993 Boris Yeltsin had eliminated
his troublesome legislature by opening fire on it.
Designed to be a professional parliament that would sit in constant ses-
sion, the new body was to have only 177 seats, forty of which were to be
filled by candidates on a presidential list. In the run-up to the March 1994
Majilis election, the restrictions on party registration were made tighter still,
and districts were reconfigured to guarantee Kazakh majorities wherever
possible. Campaigning was strictly controlled, making it hard for voters to
learn the party affiliations of candidates and often even their platforms. The
voting process was also closely stage-managed, so much so that observers
from the OSCE were initially reluctant to certify that the election had been
free and fair, and the OSCE received much criticism for eventually certify-
ing the election.
Nazarbayev had good reason to expect the 1994 legislature to be a pli-
ant partner. A full 90 percent of the new legislators were senior officials in
state or partially privatized organizations,37 while more than 70 percent of
them had never before held public office.38 At the same time, the new par-
liament reflected a surprisingly broad political spectrum. The Communist
Party was not permitted to compete, but its supporters were able to vote for
candidates from two former Communist organizations, Profsoiuz (formerly
the state-controlled trade union) and the Peasants Union, which together
received 17 percent of the votes. The Socialist Party, which had become
largely Russian in membership, won 15 percent of the vote. The soft oppo-
sition of the People’s Congress, organized by Suleimenov, appealed equally
to Russians and Kazakhs, most of those northerners, and won 13 percent of
the vote. The more nationalist-inclined parties did not fare as well: several
Kazakh groups joined under the umbrella name Azat, but these succeeded
in electing only a single, shared delegate. Tight restrictions made it impos-
sible for the Russian nationalist groups to run candidates openly, but four
delegates with close ties to LAD were nevertheless elected.39
The largest single bloc of candidates came from SNEK, the presidential
party, which received 40 percent of the vote. Obviously not a majority, this
bloc, and the other approximately thirty legislators who were staunch pres-
Martha Brill Olcott | 103

ident’s men, quickly proved unable to ensure even the election of SNEK’s
party leader, former Komsomol head Kuanish Sultanov, to the post of par-
liamentary speaker, leading Nazarbayev to accept his second choice for this
job.40 Nazarbayev, a skilled political operator, had learned always to provide
himself with a fallback position, but the Kazakh president did not forgive the
loss. Gaziz Aldamzhanov, a rising critic of the Nazarbayev regime, robbed
Sultanov of his majority and earned Nazarbayev’s lingering displeasure.
The Kazakh president wanted the legislature to be a rubber stamp for the
economic decisions taken by his government. Having just weathered the
blows of attempting, first, to cling to a continued joint currency with Rus-
sia and, second, of having faced the inevitable necessity of abandoning that
attempt, the country had now begun the complex process of privatizing the
greater part of its small- and medium-sized enterprises. This process was
turned over to a government headed by Sergei Tereshchenko, a Kazakh-
speaking Ukrainian born in Russia who lived and worked for most of his life
in Kazakhstan and who served in a cabinet dominated by ethnic Kazakhs.
Public opinion ran strongly against privatization. Many feared that it
would favor privileged families, clans, and horde members and were angry
that it would systematically shift economic advantage from the administra-
tors—many of them Russian—to a new group of mostly Kazakh successors.
Many Kazakh legislators also feared that they and their supporters would be
disadvantaged by the process. A distrust of privatization, and of Prime Min-
ister Tereshchenko’s government, provided an immediate focus for the leg-
islature. Soon after the opening of the parliament, a left-center opposition
bloc announced itself under the name Respublika (Republic),41 several of
whose members formed a shadow cabinet and developed an alternative leg-
islative program.
The opposition to Tereshchenko and his ministers came from across the
political and ethnic spectrum and included many in the Socialist Party,
members of the new Communist Party (made legal again in 1993), and
Russian and Kazakh nationalists. In May 1994, joined by legislators from the
Congress Party, they passed a vote of no-confidence in the prime minister,
111 to 28. Not constitutionally bound by this vote, Nazarbayev stated that
Tereshchenko would remain prime minister until privatization was com-
pleted. This drew more members to the Respublika group and led to the for-
mation of a nonconstructive opposition called Otan-Otechestvo
(Fatherland, in Kazakh and Russian), whose members called for
Nazarbayev’s resignation as well.42 By July 1994 this swollen opposition
104 | Trying Pluralism and Abandoning It

was able to override Nazarbayev’s veto of two consumer protection bills.
Finally, in mid-October, after a month-long scandal about the financial
improprieties of two of Tereshchenko’s ministers, Nazarbayev was forced to
accept the resignation of the prime minister and his government.
As with so many other scandals in Kazakhstan, this one fizzled after ini-
tial attention. Mars Urkumbayev (the minister of economics) and Vladimir
Shumov (the minister of the interior) were eventually charged with bribe
taking, as was Shumov’s son (Andrei) who worked for him as an investiga-
tor in the Main Department for the Struggle against Organized Crime.
Urkumbayev’s case was dropped at the end of 1996 by the prosecutor gen-
eral’s office owing to the “passage of time and change in circumstance.” In
fall 1997 he was chosen as head of the union of industrialists and entre-
preneurs. Shumov returned to Russia and served with the Ministry of the
Interior (MVD) in Chechnya. Ironically, no Kazakh government has ever
come as close to being held accountable as this first one was, but even then,
little headway was made in controlling an already pervasive pattern of offi-
cial corruption.
By 1994 Kazakhstan had developed a relatively free and vigorous media,
which provided the legislators with a venue through which their opinions
could reach the wider public. Naturally, Kazakhstanskaia pravda and Vesti
Kazakhstana, the two largest official newspapers, were strong supporters of
the government’s positions, but they felt compelled to report the speeches
of opposition parliamentarians, whose activities were more fully reported in
the major independent newspapers. The largest and most popular of these
was Karavan (and its smaller companion paper, Karavan-Blitz), a tabloid-
style newspaper that was attracted to scandals. The discussions in and
around the parliament provided Karavan’s publisher, Boris Giller, with a
great deal of material. The republic’s other major independent newspaper,
Panorama, also gave coverage to parliamentary maneuvering, although the
paper sought to be an arbiter of social and economic issues. Television and
radio covered these issues as well. Kazakhstan had several independent
radio stations and one large independent television company, KTK. Access
to the airways was still tightly regulated, so radio and television had to treat
political scandals more lightly, but nevertheless they too were able to air
them.
Even in 1994 the Kazakh media was not as free as the then virtually
untrammeled and decidedly raucous press in neighboring Kyrgyzstan.
Kazakhstan already had laws that used vague but threatening terms to for-
Martha Brill Olcott | 105

bid the publication of materials “insulting the honor of the presidency,”
which have been invoked on several occasions since independence. An eth-
nic Kazakh historian was the first to be punished.43
In hindsight, this period was the heyday of free journalism in the coun-
try. Since the mid-1990s, the government has been exerting growing con-
trol over the media but in an indirect fashion. Of some twelve hundred
media outlets in the country, more than 75 percent are in private hands.44
Yet when pressure for self-censorship fails, the government resorts to more
direct measures, such as ordering the dismissal of television journalists who
have reported the activities of leading members of the opposition.45
The government went about reasserting control over electronic media in
a clever fashion, using the stated goals of economic restructuring to work
against those of political reform. As part of the privatization process, start-
ing in 1997 all television and radio companies were required to “competi-
tively bid” for their licenses to use broadcast frequencies. In 1993 the
Ministry of Information granted licenses to 200 private applicants for a
minimal fee, but during this next round, the starting bids for television sta-
tions were set at $150,000 and for radio stations at $50,000, forcing thirty-
one stations that could not raise such high amounts to close.46 By 1999
Kazakhstan had registered fifty electronic and more than three hundred
active mass media organizations, but the nature of the broadcast industry
was changing rapidly.
As noted, President Nazarbayev’s daughter Dariga “won” the license to the
nationwide independent television broadcast frequency and quickly
emerged as a power in the broadcasting industry. The situation with regard
to print media began to change as well. In 1998 Boris Giller received an offer
for Karavan so generous that he thought it wise to retire from publishing
entirely and devote himself to his film-producing activities.47 Karavan and
its printing press were then transferred by stages to the Nazarbayev family
media empire,48 leaving the country without a major independent printing
operation. The publishers of Panorama also yielded to informal pressures.
The major opposition paper became XXI Vek, which had been associated
with former prime minister Akezhan Kazhegeldin. Their offices were exten-
sively damaged by a firebomb in September 1998, and they were eventually
forced to suspend their operations.49 After international criticism of the
incident, the paper was allowed to reopen the following year but has been
unable to publish regularly because the authorities are pressuring its pub-
lishers not to print the newspaper.50
106 | Trying Pluralism and Abandoning It

Some of the country’s newspapers closed because they were not eco-
nomically competitive, but the mass media were now being held to a tight
Law on the Press that was invoked in some two hundred criminal investi-
gations in 1998 alone. Members of the press were charged with “abuses of
freedom of speech, incitement of national enmity . . . aimed at instigating
disputes and controversy over the country’s history and sovereignty” and for
permitting “nonobjective, insulting statements directed at government
organs, officials, and ordinary citizens.” Official statements proclaimed: “It is
the media that should shape the ideals of our state and patriotic feelings.”51
The press was further manacled by the adoption of the June 1998 Law
on National Security, which gave the procurator general the right to suspend
the activity of the news media without providing for appeal. Foreign media
was also subject to the provision of this law, and these provisions were used
in October 1999 when the authorities briefly took Russian television chan-
nels that broadcasted the discovery of President Nazarbayev’s Swiss bank
account off the air.52 Foreign media was subject to further restriction in a
new media law passed in 2001.53
The most sustained complaints about abuses of press freedom occurred
during the election campaigns of 1998 and 1999 when opposition news-
papers complained that they were confronting serious administrative barri-
ers for publication and distribution. As a result, some papers had to close
before the elections, most notably SolDat. There were also complaints by
election monitors about limited access of the opposition to the press.54
More recently, efforts to muzzle the press have severely hampered
Kazakhstan’s ability to pursue a serious anticorruption campaign, allowing
the government to set whatever standards of corruption it wishes. Given the
high level of public concern, the government must appear to be actively
routing out those who abuse their official position. According to an April
2000 poll by the Association of Social and Political Scientists, 43.1 percent
of the respondents deemed corruption to be the worst evil. The press is filled
with accounts of corrupt officeholders being removed, and in 1998–1999,
twenty-four judges in Kazakhstan were fired and eight were suspended,
and 497 people were convicted on corruption charges.55 There was also
good coverage of the May 1999 blacklist of the names of civil servants dis-
missed on charges of crime or corruption who were to be banned from fur-
ther civil service.
These actions did little to convince the population that the government
is either honest or effective. According to the same April poll, only 5 per-
Martha Brill Olcott | 107

cent of respondents believed that the Kazakh National Security Committee
was effective in fighting corruption, 3 percent credited the prosecutor gen-
eral’s office with effectiveness, 2.1 percent the president, and the government
and parliament scored no points. By contrast, 45.4 percent believed that
Nachnem s Ponedelnika newspaper, which was subsequently closed by the
government (supreme court) for publishing a series of articles on corrup-
tion, was the most effective in the fight against corruption.56
The government, however, will not allow the press to lead a campaign to
achieve clean government. In July 2000, the government shut down two
independent newspapers, SolDat and Vremia Po, for reprinting articles from
foreign media about alleged corruption in the Kazakh government.57 The
government has also sought ways to regulate news services on the Internet,
and access to sites that reprint allegations of financial malfeasance by Pres-
ident Nazarbayev or his family members has become restricted in
Kazakhstan.58 Kazakh authorities are also trying to establish a national sub-
scription service that will coordinate all Internet access.
Despite increasing repression, Kazakhstan’s various media have generally
been the most professional in the Central Asian region. Partly this reflects
the quality of journalism in Kazakhstan at the time of independence and
partly the training offered to these journalists by U.S. and other international
NGOs. Proximity to Russia and the willingness of Russian media to dis-
seminate the views of Kazakhstan’s opposition also stimulated the Kazakh
press to play a watchdog role. The presentation of the news from Kazakhstan
is sometimes skewed to support Russian agendas and although the changes
in currency and intergovernmental squabbles about paying for the trans-
mission of television programs have limited the access of those living in
Kazakhstan to Russian media, the presence of this alternative source of
news has served to keep the confines of political debate in Kazakhstan from
contracting completely.

Parliament Flexes and Pluralism Delayed

President Nazarbayev quickly became unnerved by the workings of a par-
tially unfettered media and a vocal parliament. By late 1994 and in early
1995, Kazakhstan was becoming a rapidly differentiated society. Privatiza-
tion had created a small but visible layer of extremely wealthy people, while
economic collapse was creating a much larger, and no less visible, group of
108 | Trying Pluralism and Abandoning It

newly impoverished ones. Added to this, Kazakhstan’s various minority
communities were beginning to feel increasingly disadvantaged.
Even so, public support for the president remained high, including
among non-Kazakhs. In one poll in late 1995, 72.3 percent of Kazakh
respondents and 55.1 percent of Russians named the president as the one
factor doing the most to solve the republic’s crises. In the same poll, only
14.7 percent of Kazakhs and 9.7 percent of Russians said that the govern-
ment was trying to solve Kazakhstan’s problems, while 8.5 percent and 9.2
percent, respectively, thought this of local administrators.59
The enormous institutional advantages that Nazarbayev had as presi-
dent, combined with the symbolic ones he accrued as the “father of his
country,” would presumably have made him all but impossible to defeat. Yet
Nazarbayev would have had to campaign hard to ensure victory in the pres-
idential elections that were scheduled to be held in late 1995 or early 1996.
By this time there was already talk that several legislative critics had presi-
dential ambitions, most of whom had been involved in abortive efforts to
create presidential parties, including Gaziz Aldamzhanov and Serikbolsyn
Abdildin (both initially of the Socialist Party).60 Of all these men, only
Abdildin has remained an opposition figure. He heads the Communist Party
of Kazakhstan and was Nazarbayev’s principal opponent in the January
1999 presidential elections.61
Presidential criticisms of the parliament were not wholly unfair. Some of
Nazarbayev’s critics were rivals from the Soviet era, while others had their
ambitions fed by the murky interrepublic politics of those years, and espe-
cially by Russian groups trying to retain an economic and political foothold
in Kazakhstan. The lack of professionalism among many of the parliamen-
tarians must have irked Nazarbayev, who faced the pressures of running the
country and did not see himself as having the luxury of long-winded
speeches from the floor of the Majilis.
Kazakhstan’s parliament was surprisingly unproductive, passing only
seven pieces of legislation in its single year of existence. Some of the
assertiveness of parliament was clearly empire building. In late 1994 the leg-
islature attempted to seize control of the republic’s budgetary disbursement
apparatus, and in early 1995 some of the most open anti-Nazarbayev fac-
tions talked of putting forward an alternative economic development plan
that would have slowed privatization, changed the tax structure, and given
a decided investment advantage to local producers over foreigners.
Martha Brill Olcott | 109

At the same time, however, for all the obvious growing pains it was
exhibiting, the legislature was beginning to develop some of the funda-
mental characteristics of an institution capable of providing the checks and
balances essential to the functioning of a pluralistic society. Even staunch
supporters of Nazarbayev were beginning to understand that they had
responsibilities as legislators if the parliament was to function as a legisla-
tive body.
The best illustration of this growth toward parliamentary responsibility
came from Speaker Abish Kekilbayev. While remaining a strong supporter
of the president, Kekilbayev tried to increase the competency of his fellow
legislators and to defend the constitutionally defined rights and responsi-
bilities of the Majilis. He encouraged parliamentarians to visit other legisla-
tures and parliaments and began pushing the business of the Majilis away
from long-winded floor debates to that of standing committees and com-
missions. Kekilbayev also began holding the government accountable for its
actions and decrees, claiming that they must have a basis in law and that
parliament had to propose and pass new legislation rather than leave the ini-
tiation of legislation to the executive branch. Indeed, by the beginning of
1995, Kekilbayev was calling on the Majilis to resurrect and defend a
Kazakh parliamentary tradition stretching back to the councils of biis of the
fifteenth to eighteenth centuries. To Kekilbayev, the parliament, not the
president, embodied Kazakhstan’s democracy, and the country’s leaders
must answer to the parliament, and not the other way around.62
A collision between Nazarbayev and the parliament seemed inevitable
until a March 1995 decision of the constitutional court invalidated the 1994
parliamentary elections. This provided Nazarbayev with an opening to rede-
fine the constitution of the country and to avoid presidential elections.
At the time, Kazakhstan’s judiciary was the least transformed branch of
the government. There was an acute shortage of trained jurists and real
indecision about how much autonomy judges should have. The judicial
branch was also chaotically organized with what amounted to three sepa-
rate supreme courts with sixty-six judges, including a supreme court for
criminal matters, an arbitrage court for economic ones, and a constitutional
court. None of these courts had shown particular activism, but the consti-
tutional court had been the least active of all, rendering only eight decisions
since its formation in 1993, and no decisions from January to October
1994.
110 | Trying Pluralism and Abandoning It

Thus it was wholly unexpected when the court suddenly ruled in favor
of a complaint that an unsuccessful legislative candidate had brought to it
ten months before. The plaintiff in the case was Tatyana Kvyatkovskaya, a
journalist from the Abylaykhan electoral district of Almaty. She charged
that the electoral districts for the 1994 election had been disproportionately
drawn, so that legislators represented constituencies of vastly different sizes.
She also claimed that the cross-out method of voting allowed vote counters
to accept a single ballot as having been cast for many candidates if the voter
marked his ballot improperly (indeed, in several districts more votes were
recorded than there were voters). Although the complaint had been brought
about a single voting district in Almaty, the constitutional court ruled that
the entire 1994 parliamentary elections had been unconstitutional.63
In a rumor-prone political culture like that of Kazakhstan, there have
been many theories advanced as to Nazarbayev’s role in this court decision.
As noted, the original complaint had merit, for the election had indeed
been overtly stage-managed, so it is possible that the constitutional court
acted without informal or official interference. The constitutional court may
have been prompted to render a decision because its own existence was
under attack. Complaints about the costs of maintaining overlapping juris-
dictions had already prompted the previous legislature to reduce the pow-
ers of the court and transform it from a body able to initiate its own
investigations to one that could render opinions only when asked by the
other branches of government.
Minister of Justice Nagashbai Shaikenov wanted to create a U.S.-style sin-
gle supreme court and to take away from the president the power to remove
judges in order to encourage the growth of a genuine independent judiciary.
The new parliament also targeted the court, seeking to reduce its funding
and to prune its staff. The justices had much to explain: collectively they had
taken thirty-five trips abroad at state expense; the deputy chief justice had
spent a year in Moscow studying law at state expense; and two were facing
recall attempts because as senior officials in the republic’s law school they
had disciplined students and faculty for participating in the Alma Ata Upris-
ing (protesting Kunayev’s dismissal).
At the same time, the fate of the plaintiff in the case, Kvyatkovskaya, sug-
gests presidential collusion, for she went on to head the Otan party list in
the 1999 parliamentary election and then to serve in the Majilis. The court
decision also coincided with the strengthening of Kazakhstan’s security
organs. Many of the judges on the court had close ties to Kairbek
Martha Brill Olcott | 111

Suleimenov, at that time a first deputy minister of Internal Affairs and a
strong critic of Shaikenov’s proposed legal reforms.64
Although the president may not have directed Kairbek Suleimenov,
Nazarbayev was certainly pleased by his behavior. In the two-year period
following the dissolution of parliament, Suleimenov went from running the
Committee on Fighting Crime and Corruption to being the minister of the
interior, and then having the added responsibility of supervising all other
internal security issues, a function that he discharged until December
2000.65 During his tenure in office Suleimenov increased the reach of these
security organizations. Members of Almaty’s political establishment became
keenly aware that their actions were being watched and that displeasing
behavior was being duly noted. The same pattern was observed in regional
centers, which had traditionally been under tighter control.
President Nazarbayev used the March 1995 court decision to his personal
advantage. He appealed the decision one day after it was issued, on a
national holiday. When the court reaffirmed its original decision,
Nazarbayev went immediately before the parliament to inform them that
they were being annulled as an improperly constituted body and that all
their decisions were revoked. To make the point even clearer, Nazarbayev
suspended the use of all government automobiles and other perquisites; had
the power, water, and telephone for the parliament building turned off; and
sent a swarm of workmen to begin what was called necessary remodeling.
Using powers that he had been granted by the 1990 parliament right before
its dissolution, Nazarbayev declared direct presidential rule and reinstated
the government of Prime Minister Kazhegeldin, who had first been
appointed prime minister in October.
President Nazarbayev quickly looked for ways to make his actions seem
in accordance with democratic principles, but the strategy he chose showed
contempt for the goals of genuine popular empowerment. Soon after impos-
ing direct presidential rule, Nazarbayev created a People’s Assembly to sub-
stitute for the parliament, and these handpicked delegates adopted a
resolution requesting that presidential elections be postponed until Decem-
ber 2000. Claiming that he wanted to defer to “popular will,” Nazarbayev
then submitted the question to a nationwide referendum, which was held
in April 1995. At that time 91.3 percent of the voters turned out, of whom
95.8 percent voiced their support for extending Nazarbayev’s mandate. At
the end of August, a second referendum was held to sanction the adoption
of an entirely new constitution, which further strengthened the president’s
112 | Trying Pluralism and Abandoning It

power. That referendum saw a 91 percent voter turnout, with 89.1 percent
approving the new constitution, which was duly adopted. The opposition
claimed these figures were dramatically inflated through electoral irregu-
larities. Although there certainly is substance to the charges, independent
polls in Kazakhstan during this period also make clear that an absolute
majority supported Nazarbayev’s proposed changes, so vote tampering was
simply gratuitous and a further sign of the growing official contempt for
democratic norms.
The new constitution expanded presidential power at the expense of the
legislature, which became a largely consultative body, with legislation initi-
ated by the president.66 The new constitution created a bicameral legislature,
composed of the Senate (upper house) and the Majilis (lower house). The
latter had sixty-seven seats, based on districts with approximately equal
numbers of voters; representatives were to be elected for four-year terms,
with half the seats to be contested every two years. The Senate had two sen-
ators to represent each of the republic’s oblasts plus Almaty (which has
oblast status), to be chosen in joint sessions of the oblast councils, but the
new constitution also gave the president the power to overturn actions of
those same councils. An additional seven senators were appointed directly
by the president, and ex-presidents were named senators for life. The com-
position of the Senate almost ensured that the parliament was unable to over-
ride a presidential veto, which required a two-thirds majority in both houses,
as did a vote of no-confidence in a prime minister. In fact, the only check upon
the president’s power was a demonstration of infirmity or a charge of treason
that is approved by a majority vote of both houses of parliament.

The Eclipse of Parliament and the Strengthening of Cabinet Government

This shift of more power to the president was a formal institutionalization
of trends begun after the disbanding of the Soviet-era parliament in 1993
and the nine-month period of rule through presidential decree. Since that
time official interest in building democratic institutions began to fade. In his
major presidential message of 1997, Kazakhstan 2030, Nazarbayev did not
even mention the development of a democracy in Kazakhstan as one of the
eight principal goals of state building.67
In fact, democracy building was only tangentially mentioned in the goals
for the period 1998–2000.68 The statement paid little attention to the need
Martha Brill Olcott | 113

for modifying Kazakhstan’s political system. Political freedom was termed a
good thing, but only as long as it did not interfere with the ability of the gov-
ernment to provide for the social welfare of the population. Similarly, main-
taining ethnic tolerance was a goal, but those drafting the statement no
longer saw the risk of ethnic conflict as an immediate threat to the state.
It was clear that the president was feeling more confident. The 1995
Majilis, and even more so the Senate, became an extension of the presiden-
tial court. The largest single bloc in the Majilis came from the president’s own
People’s Unity Party, while another twenty-one seats came in ones and twos
from such past or present elite organizations as the Youth Union, the Lawyers
Union, the Union of Entrepreneurs, and the (new) Communist Party of
Kazakhstan.69 Yet even this legislature was unwilling to turn itself into a rub-
ber stamp of presidential initiatives. While legislative rebellions were rare,
their very existence demonstrated that pressures toward pluralism were con-
tinuing in Kazakhstan, especially with regard to social welfare issues.
Kazakhstan was slowly retreating from the unrealistic social benefit pro-
grams that it had originally enshrined in the constitution, a legacy of what
the citizens of socialist states expected to receive from their governments.
Among these benefits was the right, retained from the Soviet period, for men
to begin receiving state pensions at age sixty and women at age fifty-five. In
May 1996 a bill was brought before the lower house to raise those ages to
sixty-three and sixty, respectively. Pensions, although miserly and irregularly
paid, nevertheless constituted a major item in the republic’s budget.70 As
then Prime Minister Kazhegeldin noted, Kazakhstan had 2.8 million pen-
sioners, 16 percent of the entire population; more important, the republic
had one pensioner for every two workers. With many others approaching
the existing pension age,71 the projected costs of state pensions threatened
government efforts to reduce the state’s budget deficit to 3 percent of the
GDP, which was required for continued international financial support.
It came as a surprise when the parliament rejected the government’s bill
and created a full-blown government crisis. As the new constitution stated,
if a government bill is twice rejected by the parliament, the president has to
either dissolve parliament or dismiss his prime minister. After postponing
the second vote for 48 hours, presumably to give all sides a chance to think
through their positions, parliament faced a vote of confidence requested by
Prime Minister Kazhegeldin, which passed 35 to 10 in the Senate and 41 to
19 in the Majilis. The pension bill was therefore resubmitted the following
day, and it passed by the same margin.
114 | Trying Pluralism and Abandoning It

The passage of this bill averted the possibility that Kazakhstan would face
its third set of parliamentary elections in as many years. While the parlia-
mentary about-face demonstrated a general inclination to defer to Presi-
dent Nazarbayev and his ministers, there remained a minority, even in the
Senate, that cast an independent judgment. More remarkable is the shame-
faced air evident in the accounts of the maneuvering that took place between
the first and second votes. Although most of the legislators caved to gov-
ernmental pressure, the speaker of the Majilis, Marat Ospanov, took pains
to depict the parliamentary reversal as both principled and logical, arguing
that the legislature had put the government on notice that future parlia-
mentary support should not be taken for granted, especially on social
issues.72
Of course, President Nazarbayev was usually able to nudge the legisla-
ture, given its makeup, in directions that he and his advisers considered nec-
essary. Even so, the government faced heavy opposition in early 1997 when
pushing for the passage of a bill requiring the universal use of the Kazakh
language by ethnic Kazakhs by 2001 and by non-Kazakhs by 2006.
Nazarbayev was able to get support from the Majilis but was rebuffed by the
Senate, forcing the language bill back into the Majilis for modification. The
final version, from July 1997, stated that Kazakh would be the language of
state administration, legislation, legal proceedings, and record keeping in all
spheres of social relations.73 While mandating the advancement of Kazakh
through education, the schools, and special training programs so that all res-
idents would be fluent, it also reaffirmed Russian as an important language
in the country and awarded it a status “on par with the Kazakh language in
state organization and bodies of local self-government.”74
With the muscle taken out of parliament, the cabinet and ministry sys-
tem was becoming one of the few potential arenas for political contestation.
Largely because of an effort sponsored by international financial institu-
tions to downsize the overblown bureaucracy that Kazakhstan had inherited
from Soviet times, an effort was made to eliminate redundancies at every
level of administration—in the ministries, in the presidential apparatus,
and in the oblasts.75
These changes too were handled in ways that increased Nazarbayev’s
personal authority or were otherwise convenient to the ruling elite. In March
1997 the cabinet system was sharply streamlined, with the number of min-
istries reduced from twenty-one to fourteen, and the number of subcabinet
committees and commissions was curtailed as well. By the end of May one-
Martha Brill Olcott | 115

third of the national government had been eliminated, creating a savings of
nearly two billion tenge (the Kazakh currency since 1993) in annual salaries
for 1997 alone, and freeing 200,000 square feet of government office space
for commercial use, which provided a new source of kickbacks to the gov-
ernment officials who managed the ministries and agencies that were free to
dispose of excess space.
However, while the streamlining of government may have led to bud-
getary savings, it did not make incumbents more competent or eliminate
bureaucratic redundancies. For example, after the shakeup, the responsi-
bility for economic planning was still divided among the newly created
Strategic Planning Agency, the Supreme Economic Council, the Ministry of
Economy and Trade, the Ministry of Finance, and the Customs Service.76
If anything, the government reorganization led to a greater turnover at the
top levels of government since President Nazarbayev wanted simultane-
ously to create government sinecures for loyal supporters and to build inter-
national confidence in his administration.
Nazarbayev’s hand was freed by the departure of Kazhegeldin as prime
minister in October 1997, initially claimed to be due to health problems. In
fact, Kazhegeldin was removed because he was a potential rival to
Nazarbayev and more popular with Western business people, since the
Kazakh prime minister seemed knowledgeable about economics and was
perceived to be less corrupt than were the president and his entourage.
Kazhegeldin’s critics would argue that the former prime minister was better
only about hiding his malfeasances. Nazarbayev saw Kazhegeldin as posing
a threat, largely because of the powerful economic interests to which the for-
mer prime minister was connected. Kazhegeldin, who is from northern
Kazakhstan, spent most of his career developing ties to defense-related indus-
tries, and for at least part of this time he served as an employee of the KGB.
Kazhegeldin rewarded some of his former colleagues when he presided over
the privatization process, passing control of Kazakhstan’s vast metal deposits,
stockpiles, and refineries to Russian investors with purported ties to the old
Soviet security establishment and exempting the stockpiles from payment of
Kazakhstan’s value added tax. Initially, Nazarbayev may have felt too weak to
take on these powerful interests, but by 1997 he felt able to step in to fore-
stall Kazhegeldin’s developing an impregnable power base.
Kazhegeldin was replaced by Nurlan Balgimbayev, who had previously
headed the Kazakh state oil company and who was a close associate of Pres-
ident Nazarbayev. Balgimbayev’s ascendancy also marked Kazakhstan’s
116 | Trying Pluralism and Abandoning It

growing preoccupation with the development of oil and gas reserves, which
was the one area of the economy that showed signs of being able to sustain
long-term foreign investment interest. Balgimbayev was eager to be rid of his
predecessor’s team but proved a less competent administrator and was more
susceptible to presidential pressure. Several prominent reformers left,
including most notably National Securities Commission Chairman Grigory
Marchenko,77 while a number of people with dubious pasts reappeared,
such as Asygat Zhabagin, who was appointed to a new combined ministry
as the minister of energy, industry, and trade,78 and the controversial
Sarybay Kalmurzayev, the former director of the State Property and Assets
Committee, became akim of Zhambyl oblast.79
Balgimbayev tried to make the government more appealing to the inter-
national community by inviting some of the “young Turks” of the Kazakh
business world into the government.80 The young Turks were in their twen-
ties and thirties and had managed to amass large personal fortunes during
the late Soviet period and the first years of privatization, some because of ties
to the Nazarbayev family and others because they had sufficiently ingrati-
ated themselves.81 For example, Bulat Abilov of Butya became one of the
leading patrons of Kazakhstan’s Children’s Fund, which is headed by Mrs.
Nursultan Nazarbayeva (Sara Alpysovna). At the same time, the young Turks
were not permitted to compete with those in the inner circle, as Mukhtar
Ablyazov found out when he positioned his company to compete in the
sugar market with the firm run by Nazarbayev’s son-in-law Rakhat Aliyev.
The finances of Ablyazov’s sugar operation were scrutinized, and taxes with
penalties were assessed, although his other holdings went untouched.
This effort to broaden the base of the government, though, did little to
deflect the criticism of Balgimbayev that was mounting within Kazakhstan’s
political establishment by people in business who were on the outs with the
government, the remnants of the former Communist elite, and the opposi-
tion forces from the previous two parliaments. Nazarbayev may have dom-
inated the country’s political life, and even pilfered enough from the
economy to allow all those close to him to live like royalty, but his control
was not sufficient to make the elite speak with one voice.
Issues pertaining to the economy could still be debated. Particularly con-
tentious was the fiscal conservatism of Balgimbayev, who was seeking to
maintain Kazakhstan’s credibility with the international financial institu-
tions that were financing the country’s economic recovery program. Parlia-
ment continued to be the locus of criticism on these questions.
Martha Brill Olcott | 117

Balgimbayev’s popularity was not aided by Russia’s financial crisis in August
1998, which produced rapid aftershocks for the Kazakh economy. Although
Kazakhstan’s economic downturn was not nearly as severe as that of Russia’s,
the Kazakh prime minister was criticized for not doing enough to insulate
the Kazakhs from the influences of their powerful northern neighbor. Par-
liament initially focused its frustration on the minister of finance, Saut
Mynbayev, and even brought an unsuccessful vote of impeachment against
him in the fall of 1998: twenty-six for impeachment and twenty-eight
against. This was the vote of a supposedly loyal legislature.82
In fact, the growing mutterings concerning Balgimbayev’s performance
may have been partly responsible for President Nazarbayev’s decision to
call for early elections for both the presidency and the parliament.
Nazarbayev initially met with some resistance when he proposed the con-
stitutional amendments necessary for these elections to be held, first from
the legislature and then from the constitutional court. In the end, a joint ses-
sion of Kazakhstan’s parliament approved compromise legislation that cut
Nazarbayev’s presidential term by two years but gave a green light to the
early elections.83
Yet Nazarbayev stuck with Balgimbayev, a career oilman with close ties
to Russia, whose policies were still credible for the foreign investment and
financial community. On January 21, 1999, the day after Nazarbayev’s inau-
guration, the country’s parliament once again endorsed Balgimbayev to the
post of prime minister and kept most of the prominent figures in place.84 In
August 1999 Balgimbayev also managed to avoid ouster in the North Korean
MiG sale, although the United States would have liked the Kazakhs to have
done more official atoning for these events. Only Defense Minister Muhtar
Altynbayev and Security Committee Chairman Nurtai Abykayev were dis-
missed “for grossly violating procedures for selling military equipment.”85
Altogether, forty MiG jets were sent to North Korea under the supervision
of these top figures in the Kazakh government. In addition, in the spring of
1999, six Kazakh MiG–21 fighter jets on board a Russian Ruslan aircraft en
route to Bratislava and destined for North Korea were seized at the Baku
airport.
The parliamentary pressure on Balgimbayev began steadily mounting
after the presidential elections, largely because of budgetary issues. The
combined impact of the previous year’s financial crisis and the low price of
oil made maintaining a low budget deficit difficult. Ospanov went so far as
to threaten that the Majilis would vote no-confidence in the government if
118 | Trying Pluralism and Abandoning It

it would not negotiate the terms of the proposed budget deficit.86 In the
summer of 1999 Ospanov again led a parliamentary tirade on budgetary
issues, this time clashing with the president, who floated the idea of bypass-
ing the old parliament entirely and ruling by decree until after the parlia-
mentary elections scheduled for late 1999. Ospanov, who died in January
2000 after suffering a brain hemorrhage, was a rather enigmatic figure. A
leader of Tereshchenko’s Otan, he wanted to become prime minister and
might have been trying to fashion himself as a democratic alternative to
Nazarbayev given Ospanov’s forceful defense of the idea of freedom of the
press and the importance of competitive elections.87
Nazarbayev chose to move the government in a different direction. In
early September, when the Kazakh president sharply criticized the cabinet
at the opening session of the country’s parliament, it became clear that the
government was doomed. The Kazakh economy would have sustained
much lighter damage, he said, had the cabinet not made numerous errors,
including the choice of a floating exchange rate and of the National Bank’s
refinancing rate.88 Balgimbayev’s suggestion that Kazakhstan sell a 10 per-
cent share in the Tengiz oil field (40 percent of its remaining holdings) in
an effort to keep the budget deficit under control led to further criticism that
Kazakhstan was sacrificing its long-term interests to short-term ones.89
Eager to hold parliamentary elections in a less hostile environment,
Nazarbayev asked for Balgimbayev’s resignation on October 1, 1999, nam-
ing Kasymzhomart Tokayev in his place, allowing the dismissed prime min-
ister to return to his former post as the head of Kazakhoil.90 Nazarbayev also
used a presidential decree to reorganize the government, once more redefin-
ing the institutions that were charged with overseeing economic reform and
many basic social services.91 The Tokayev government brought back several
reformers, most prominently Grigory Marchenko, who became the head of
the National Bank, which was not a formal cabinet position. Although the
capital was already awash with rumors about Tokayev’s own alleged malfea-
sances, Nazarbayev stressed the clean records and moral purity of these
nominees in an effort to breathe credibility into his failing anticorruption
campaign.
The appointment of the Tokayev government put to rest the rumors that
were circulating in Kazakhstan for close to a year that President Nazarbayev
would simply eliminate the institution of the cabinet and rule by decrees
issued through his presidential apparatus.92 Cabinet reorganization seemed
sufficient to meet the apparent goal of strengthening the economic hold of
Martha Brill Olcott | 119

the official family. Most of the so-called young Turks were removed and
replaced by people whose connections might be beneficial to Nazarbayev.93
Uraz Dzhandosov, the former first deputy prime minister, managed to hang
on as the minister of finance, but he eventually left his position in 1999, only
to return in December 2000 as the deputy minister.

Manipulating the Electoral Process

The stage was now set for the 1999 presidential and parliamentary elections.
Most observers view as disingenuous Nazarbayev’s claim that he was not
personally responsible for either the timing or the conduct of these elections.
Certainly, he tried to make his actions seem acceptable to the international
community. In these months the Kazakhs were reported to have paid large
fees to Western law firms and public relation firms, including Akin, Gump,
Strauss, Hauer, and Feld, the Carmen Group, and Mark A. Siegel and Asso-
ciates.94 The latter firm was hired to help the government reform its electoral
system and to lobby Western experts on behalf of the government.95 The
Kazakh government tried to create an image of supporting democratic
reforms; for example, in a September 30, 1998, address, less than two weeks
before parliament moved for early election, Nazarbayev laid out a blueprint
for the further democratization of the country, promising to increase the
power of parliament, decrease that of the presidency, and pledging that all
future elections would be free and fair.96
Nevertheless, parliamentary legislation introduced on October 7 was tai-
lor-made to allow Nazarbayev to serve out the rest of his life as president.
It brought forward the date of the elections, extended the president’s term
in office from five to seven years, and dropped age and term restrictions.
Elections were set for January 19, 1999, too soon for any meaningful oppo-
sition to be launched since most potential contenders had oriented them-
selves to the idea of an election in December 2000.
The one presidential contender who seemed poised to move quickly was
barred from seeking office because of his newly acquired criminal record.
Former Prime Minister Akezhan Kazhegeldin, who had been heading the
country’s Union of Industrialists and Entrepreneurs since he left the gov-
ernment, was convicted of participating in an unsanctioned election rally,
planned by the hastily organized Movement for Fair Elections.97 Despite
considerable U.S. and OSCE pressure to pardon Kazhegeldin, Nazarbayev,
120 | Trying Pluralism and Abandoning It

who disclaimed personal responsibility for Kazhegeldin’s arrest, maintained
that as president he was bound to enforce the country’s laws and did not
criticize the action of the Kazakh court.
In November 1998, while struggling to get on the presidential ballot,
Kazhegeldin formed the RNPK political party, which quickly attracted many
of the leaders and supporters of Azamat. Referring to a “citizens’ move-
ment,” Azamat was organized in 1996 by Petr Svoik, Galym Abilseitov, and
Murat Auezov. Svoik was a former legislator who had chaired the antimo-
nopoly committee in Kazakhstan’s first postindependence legislature, while
Abilseitov served as the minister of science until August 1994, when he was
named deputy prime minister. He remained in the government until 1995.
The third co-chairman of Azamat, Murat Auezov, was a former ambassador
to China. Auezov’s status as the son of Kazakhstan’s most celebrated Soviet-
era writer, the late Muhtar Auezov (1897–1961), seems to have offered him
some protection. In December 1997, Svoik, his wife, and two other party
leaders were beaten up in a hotel room in Bishkek, Kyrgyzstan. In the same
month, Abilseitov was sentenced to fifteen days in jail for organizing an
unsanctioned demonstration.
Auezov initially announced his intention to oppose President Nazarbayev
in the January 1999 presidential race but later dropped out. Nazarbayev did
not seem concerned with the threat posed by Auezov or by any of the Kazakh
and Russian nationalist leaders, and Communist Party leader Serikbolsyn
Abdildin became Nazarbayev’s principal opponent in the 1999 elections.
The Communist’s candidacy could have been foiled by legislation that
restricted the activities of agents of foreign states, and in April 1996, Kazakh
Procurator General Mahsut Narikbayev threatened to ban the Communist
Party because its founding documents called for reinstating the Soviet Union.
This, he said, violated Kazakhstan’s constitution, which set down sovereignty,
independence, and indivisibility as the core principles of the state.98
The opposition candidates had slightly longer than a month to register,
collect the signatures of 170,000 supporters, pass a Kazakh language exam,
and pay an election fee of $3,000.99 This was something that those who were
committed to a free and fair election in Kazakhstan found disturbing, but
the OSCE was unsuccessful in its rigorous efforts to get the Kazakh gov-
ernment to postpone the elections so that Nazarbayev’s opponents would
have more time to campaign.100
Nazarbayev was obviously frightened that someone from the Kazakh
political elite would decide to oppose him. For the first years of his presi-
Martha Brill Olcott | 121

dency the figure he feared most was Olzhas Suleimenov, who by the 1999
election was in his sixties and seemingly had fully spent his political ambi-
tions. Now Nazarbayev had two far more formidable figures, Kazhegeldin
and the former mayor of Almaty city, Zamanbek Nurkadilov. Both men had
powerful bases of support, Kazhegeldin because of his close links to Russia’s
military-industrial elite, and Nurkadilov through business and real estate
interests around Almaty.
Nazarbayev was able to come to terms with Nurkadilov, who was allowed
to shift his power base to Almaty oblast, which he was appointed to head.
Given the nature of his contacts, Kazhegeldin could not be bought off, and
Nazarbayev simply did not want to face him, despite the fact that most
independent observers thought that the incumbent president would hand-
ily defeat the former prime minister. Maybe the Kazakh leader was fearful
that his margin of victory would be an embarrassing one and thought that
he was above potential embarrassment.
Nazarbayev was able to claim a resounding victory against the Commu-
nist Party leader and two political lightweights; he received 81 percent of the
vote, with a reported voter turnout of 88 percent. Abdildin came in second
with 12 percent, independent Gany Kasymov managed 5 percent; Engels
Gabbasov of PNEK received 1 percent; and 2 percent of the voters cast their
ballot against the standing candidates.101 Stories of election-return falsifica-
tion circulated throughout the country, and Nazarbayev was reported to have
done particularly poorly in western Kazakhstan, where promises of oil and
gas wealth have yet to be transformed into improved standards of living.
Claiming a new mandate and acting impervious to foreign criticism, the
president and his supporters turned their attention to the parliamentary
elections that were scheduled for the fall of 1999. Although the October
1998 constitutional amendments had raised the term of office for deputies
in the Majilis from four to five years and that of deputies in the Senate from
five to six years, these changes also opened up the electoral process slightly.
Ten new seats were added to the Majilis, to be filled by proportional repre-
sentation from political party lists. The size of the filing fee for candidates
decreased from 100 to 50 times the minimum wage, the restrictions against
those who had participated in unregistered public groups were lifted, and
the requirement that a 50 percent voter turnout was necessary for a contest
to be valid was eliminated. All these changes were incorporated in the May
1999 election law,102 which did not set the conditions for the elections to be
free and fair since the candidates were not guaranteed equal access to mass
122 | Trying Pluralism and Abandoning It

media, and those, like Kazhegeldin, who had received “administrative pun-
ishments,” were barred from running.
Elections to the Senate were held on September 17, 1999. International
observers found the conduct of the voting to have been generally fair, but
not without irregularities, such as the refusal of the chairman of the Almaty
election commission to accept guidance from the secretary of the Central
Election Commission. More troubling was that senators were elected by the
outgoing maslikhats, whose members would face election in less than a
month.
Another black mark was the treatment of Kazhegeldin, who was arrested
in Moscow on an outstanding Kazakh warrant the day after he was denied
registration as a parliamentary candidate. Although he was later released,
RNPK refused to participate in the Majilis elections as a party and recalled
its party list from the Central Election Commission. By this time, though,
party unity was at issue as some in Kazakhstan’s opposition were becoming
uncomfortable with the hypocrisy of Kazhegeldin’s people giving vast sums
of money to advance democratic ideals. Lira Bayseitova, a former leader,
explained why she opted to leave the RNPK: “They [the staff of the execu-
tive committee of the party] are both former Young Communist League
(Komsomol) and Soviet Communist Party members who care nothing for
the people. I decided that it was pointless to fight from within. You have to
start waging the fight from outside.”103
The Majilis election campaign was marred by other irregularities. Accord-
ing to the RNPK members, thirteen state-controlled companies refused to
publish their party’s election platform. In addition, the pro-regime Civil
Party was accused of buying votes with charitable gifts. Panorama published
an article accusing the party of distributing free home appliances, including
television sets and stereo systems, to Kazakhstan’s border guards. The Cen-
tral Election Commission took no action, however, citing the election law
provision that parties could spend campaign money for charitable purposes.
In the first round of elections to Majilis and local maslikhats, held on
October 10, 1999, the official voter turnout was 59.78 percent, low by
Kazakh standards, which suggested that public apathy was becoming more
of a problem. Four political parties crossed the stipulated threshold of 7 per-
cent of the popular vote and would occupy the ten seats. The opposition
Communists and Agrarians won two seats each, and the propresidential
Otan and the Civil Party received four and two seats, respectively.104 Twenty
candidates received a majority and were elected in single-mandate districts.
Martha Brill Olcott | 123

The remaining thirty-seven seats were contested in the second round, held
on October 24, 1999.105 As a result of the elections, the progovernment
parties received 57 percent of the vote and managed to secure 80 percent
of the seats in the Majilis. According to the Central Election Commission,
60 percent of the newly elected Majilis members were either already
deputies or were connected to state or local power structures.106
One hundred seventy international observers, including 150 from OSCE,
monitored the voting, and most of the Westerners among them considered
Kazakhstan’s 1999 Majilis elections to be seriously flawed. Kazakhstan’s
neighbors offered little or no criticism, however, seemingly agreeing with
Vladimir Yatsenko, a member of the Ukrainian parliament and the CIS inter-
parliamentary assembly, who concluded that there were no major irregu-
larities in the elections.107
The representatives of most of Kazakhstan’s opposition parties disagreed.
Azamat, the Socialists, Azat, Yedinstvo, and the RNPK all complained to the
international observers about harassment, surveillance, denial of access to
the state-run media, and arbitrary banning from registering candidates. One
former Majilis candidate, Vladimir Chernyshev, even requested political
asylum at the British embassy, citing the “impossibility of being able to exer-
cise the right to be elected”; he maintained, “It is better to live in a monar-
chy than in secular, law-governed Kazakhstan.”108

Is the Current System Workable?

The 1999 elections helped to transform Kazakhstan into the kind of coun-
try that President Nursultan Nazarbayev wants it to be, one with a strong
president and an opposition that is sharply restricted in its freedom of action
and range of activities. What is less clear, however, is whether this form of
government is well suited to the tasks that Nazarbayev and his government
face. The president is powerful and insulated from the population by a
“court” of family and loyal supporters who surround him. While structural
changes impede the potential success of opposition groups, these groups
continue to exist and to challenge Nazarbayev. Nevertheless, they are denied
the institutional setting necessary to do so in constructive ways.
The intimidation of leading opposition members has continued and
even escalated. In September 2000 Lira Bayseitova was beaten up and
nearly killed, while RNPK leader Gaziz Aldamzhanov formally resigned
124 | Trying Pluralism and Abandoning It

his party post in January 2001, citing his weariness with the official harass-
ment of himself and his family members. The absence of an elective oppo-
sition is beginning to prove costly for Kazakhstan. While the level of
professionalism of the presidential apparatus is increasing—and a new
generation of bureaucrats who have international experience is beginning
to replace the older, Moscow-trained ones—the legislation put forward lacks
the kind of reflection that a vigorous debate in the press or the legislature
would produce.
Thus, while individual pieces of legislation are often drafted in close con-
sultation with international experts—and this includes some of the legisla-
tion redefining Kazakhstan’s legal system as well as many of the major
economic reform bills introduced since 1995—the resulting political system
is founded on the idea of the rule of law but whose incumbents lack respect
for the law itself. As I explain in the next chapter, the legal infrastructure
does not offer predictable or consistent protection for either foreign or
Kazakh property and contractholders.
While the president regularly delivers strident speeches on the need to
stamp out corruption, there are few if any checks on his own personal
power or the exercise of authority by those close to him. All the formal
political institutions that could serve as centers of opposition have had their
autonomy curtailed, while the strengthened presence of security organiza-
tions inhibits journalists and ordinary citizens from expressing their dis-
pleasure at the concentration of power in the hands of a privileged few.
The top leaders of the country are all reported to have used political
position for their own economic advantage. Nazarbayev’s efforts to uncover
Kazhegeldin’s hidden assets led to some of his own being divulged as well
and have spurred investigations by Swiss and U.S. courts.109 Well-paid inter-
national legal teams, retained by the members of the Kazakh ruling family
as well as by the Western firms alleged to have provided money to them,
may succeed in getting any future indictments quashed and making it more
difficult to report on these developments. An atmosphere of official cor-
ruption continues to set the tone of public life in Kazakhstan.
In today’s Kazakhstan, elite preferences are all that matter. A small and
largely mono-ethnic elite has taken a disproportionate share of the benefits
of economic transformation but has failed to provide basic services to a
large and increasingly impoverished multi-ethnic majority. Even though the
country’s population has become more ethnically homogeneous (as I discuss
in chapter 6), it has also become poorer and more dissatisfied.
Martha Brill Olcott | 125

Whatever the desires of its leadership or of any single constituency within
the state, Kazakhstan will remain a heterogeneous society for some time to
come, with enormous regional as well as ethnic diversity. It is impossible
that the interests of all these many groups should coincide, and the pressures
inherent in the country’s makeup will need venting. This was precisely the
justification for the liberalization campaign of the late Soviet period when
Gorbachev, in an effort to allow popular grievances to be expressed, per-
mitted the formation of informal groups.
Many of the agenda items of these first political groups have been
addressed; the Kazakhs have had their language and culture restored to a
place of prominence and can rewrite history to their own choosing.
Although the ecological despoliation of Kazakhstan has not been reversed,
both the government and the international community accept its redress as
part of their burden. Moreover, the Kazakhs have, formally at least, become
the masters of an independent country, something that its first political
organizations, formed only twelve or thirteen years ago, never thought was
a real possibility.
Independence is not a political solution; it is simply a change in juridi-
cal status, a critical one to be sure, especially for the ruling elite. But in the
absence of institutional development, the only difference for the masses is
psychological, and the benefits or hardships it provides are ephemeral. Eth-
nic Kazakhs may have believed initially that they had gained status from
independence, just as ethnic Russians felt they had lost it, but the differences
in perception of the two communities are narrowing and will continue to
narrow with time. Those who live in a country should feel they have a stake
in its future or, failing that, feel some hope for their own future or that of
their children.
When the Kazakhs became independent, the government gained breath-
ing room and various new symbolic weapons to use in its efforts to appease
the population. Central to this was the idea that independence in and of
itself would be the source of a better life for Kazakhstan’s new citizens.
In the early years of independence people could still hold on to the old
Soviet-era myth that things would be better in the not too distant future. Ten
years later, however, the poor are growing poorer and recovery seems
beyond their reach. The memory of the last years of the Soviet Union is still
vivid for most of Kazakhstan’s citizens; they know firsthand that govern-
ments are brought down when thousands of people take to the streets. To
some extent, this has had a salutary effect: in Kazakhstan the old Soviet
126 | Trying Pluralism and Abandoning It

pessimism still prevails; people believe that things might get worse if one
tampers with them. As long as there is no particularly attractive political fig-
ure on the horizon, President Nazarbayev is safe because the people of
Kazakhstan are likely to continue to prefer the devil they know.
However, this will not make Kazakhstan’s citizens happier about their
fate. If the government continues to maintain institutions that are only nom-
inally participatory and fail significantly to reflect public will, then
Kazakhstan’s social tensions could erupt when the population inevitably
demands accountability from the country’s leadership. The press may choose
not to report the kinds of pressures that the regime is under, but the sources
of social unrest will continue to well up and seek political expression.
Nazarbayev realizes this and so has curtailed the independence of the press
and the power of the legislature. For this same reason the Kazakh president
has limited the authority of local governments and refused to allow local
executives to be elected by their populations.
Nazarbayev’s self-confidence has certainly increased in recent years, and
he believes that he can get away with such actions. He has learned about the
privileges accorded to the leaders of resource-rich states. Frequently feted
in the national capitals that are home to the Western oil companies invest-
ing in Kazakhstan, he sees no reason to pretend to embrace political ide-
ologies that are fully alien to him, and he is not shy about making it clear
that democracy is one such ideology.
Nazarbayev’s complacency is in part fed by the neighborhood where he
lives. There are few success stories in the states carved out of the Soviet
Union. Nazarbayev’s support for macroeconomic reforms has made
Kazakhstan a model in the region. It is easy for him to compare the condi-
tions in neighboring Uzbekistan, where the regime is approaching Stalinist
norms in its repression of the population, and feel self-congratulatory about
how good things are in Kazakhstan. When he looks at Russia, he sees a
regime trying with real difficulty to reassert control over a fractious politi-
cal system that some see as weakened in the name of democracy or local
autonomy.
Yet a tour of these countries does not give a full accounting of the polit-
ical options available to the rulers of newly independent states, nor does it
speak to the likely political and social outcomes of their choices. Nazarbayev
is ignoring his population, and those living in Kazakhstan are still being fed
a diet of future gratification, with promises that when the country begins to
Martha Brill Olcott | 127

realize profits from its oil and gas sector, the National Oil Fund will ensure
that the whole population benefits.
Portioning out small shares of future income will not substitute for polit-
ical reform. The Kazakh government must either embrace the diversity of
interests in Kazakhstan or close off all avenues for the expression of its
nation’s diversity by imposing an unabashedly autocratic form of govern-
ment. After some cautious exploration of the former, Kazakhstan’s leader-
ship has increasingly tended to move toward the latter. Whether such
autocracy might be imposed, and whether it will prove stable if imposed,
depends to a great extent upon the republic’s economy, the subject of the fol-
lowing chapter.
5

Economic Development or
Stealing the State?

Tmosthetimony
process of economic transformation in Kazakhstan gives striking tes-
to the difficulties of moving to a market economy, even in the
resource-rich of newly independent states. Kazakhstan’s leaders inher-
ited a situation that gave them a real reason for optimism. The country’s
economy was diverse, with sufficiently well-developed manufacturing and
agricultural sectors to allow a smooth transition to an independence in
which public satisfaction was kept high enough to maintain political
stability.
In the postcommunist world, Kazakhstan is second only to Russia in the
variety and abundance of its natural resources. At independence,
Kazakhstan was nearly as rich in human resources as it was in natural ones.
With a relatively small, well-educated, and reasonably well-disciplined pop-
ulation, the quality of the state’s human development—a UNDP-devised
measure based on a combination of life expectancy, basic living conditions,
education level, and gross domestic product (GDP)—put Kazakhstan in a
similar position to Mexico and Poland.1
There was thus every reason to expect that Kazakhstan was poised to
become an economic success story, a new “snow leopard” to sit alongside the
Asian tigers. To succeed, Kazakhstan’s leaders had to confront a fourfold
challenge: they had to disentangle their country’s economy from Russia and
also from the economies of the other post-Soviet states; they had to priva-
tize the country’s resources and economic enterprises but leave the state

128
Martha Brill Olcott | 129

capable of meeting its own payroll and social welfare burdens; they had to
stimulate foreign investment; and finally, government officials had to find
the political will to discipline themselves and their relatives to ensure that
the level of corruption would not cripple the functioning of the economy.
The first three problems were partially interconnected. Though diverse,
the economy was far from self-sufficient. Virtually every enterprise—
whether a mine, a factory, or a business—was a link in a production cycle
that stretched outside the republic. Most of the economy of northern
Kazakhstan was directly connected to that of southern Siberia, while enter-
prises in southern Kazakhstan were almost entirely dependent on energy
sources in Uzbekistan.
The same was true of Kazakhstan’s transportation and communication
system. Although designed to integrate Kazakhstan into the larger Soviet
Union rather than to serve the needs of the republic as a unit, the infra-
structure of the republic was nevertheless well established, with roads,
bridges, railroads, telecommunication, and other structures that most newly
created countries could only envy. As a landlocked nation, however,
Kazakhstan could reach the outside world only by sending its goods through
neighboring states. This has created enormous complications for investors
in Kazakhstan. While the country has attracted more FDI per capita than
any other post-Soviet state, the money coming into the country has been
slow to contribute to an overall improvement in the standard of living.
Despite its promise, the reality of the republic’s economy since indepen-
dence has been one of sharp decline followed by partial recovery. Although
the shift to market conditions (and world prices) has led to an increase in
the per capita income in Kazakhstan, this comes chiefly from the sale of nat-
ural resource stockpiles. The profits obtained from these sales went largely
into a small number of private hands and were not reinvested in the coun-
try’s economy. So while the per capita GDP increased fourfold from 1991,
up to $1,317 per capita in 1995, the share of both industry and agriculture
declined, from 30.1 to 23.5 percent and from 16.2 to 11.7 percent, respec-
tively, in these sectors that accounted for most of the country’s employ-
ment. Kazakhstan’s industrial crisis left the country with an unresolved debt
crisis with Russia and bankrupted many of its municipalities. By late 1996
the situation was dire. That winter (1996–1997), many of the republic’s
cities were without heat or power for long periods, and even in Almaty fre-
quent power shortages forced some residents to cook over open fires in the
courtyards outside their apartment buildings.
130 | Economic Development or Stealing the State?

According to Kazakhstan’s Ministry of Finance, 44 percent of businesses
lost money in 1996 (these statistics include only those firms that were still
operating). Industry had all but collapsed, while unemployment had risen
sharply, its true extent masked by the widespread practice of keeping work-
ers on their jobs only nominally, producing little, and withholding their
pay for months at a time. While workers in the Russian-dominated north-
ern part of the country had been demonstrating periodically since the early
1990s, by 1997, the workers in the Kazakh-dominated southern part of the
country had also begun to organize and sustain strikes on their own.
Increased foreign investment and higher oil prices have brought some
improvement, but the per capita GDP peaked at $1,423 in 1998 and then
went into a steep decline in 1999 (down to $1,058), reflecting the down-
ward trend in the global economy. In 2000, the per capita GDP managed a
slight comeback.2
The process of economic development has yet to create a flourishing
new entrepreneurial class. Instead, it has led to the formation of a narrow
and extremely wealthy elite that has enormous resources concentrated in its
hands. The elite has been reluctant to reinvest its resources at home, even
when offered a tax amnesty. While the country is becoming increasingly oli-
garchical, the government has adopted a formal posture designed to develop
public confidence. A well-publicized anticorruption campaign was launched
in 1997, and measures were taken to strip corrupt investors of lucrative
management contracts that had been given during the privatization of cer-
tain large enterprises. The bureaucracy charged with overseeing private
investment was overhauled and put on notice that corrupt and wasteful
practices had to end after there was a nearly tenfold increase in “budget
evaporation” in 1996. A few dismissals have occurred, but the effort to “root
out and punish” prominent figures is at best symbolic. The favorites of one
prime minister were simply replaced by the industrial entrepreneurs cham-
pioned by his successor.
At the same time, the living standards of the population have been
steadily eroding, so that by 1996 Kazakhstan stood just below the Philip-
pines in the United Nations’ Human Development Index ranking. By 2000
Kazakhstan had climbed back to seventy-fifth place, a level that is still four-
teen places below its original rank at the time of independence.3
While there is still great hope for the next phase of foreign investment,
which is to include increased rates of exploitation of the nation’s oil and gas
reserves, and the government promises that these profits will be invested in
Martha Brill Olcott | 131

the National Oil Fund, this stage is still several years away. For now, though,
while the size of Kazakhstan’s economy continues to increase, the decline in
both the agricultural and the industrial sectors has continued (see appen-
dix 5), meaning that Kazakhstan’s economy is increasingly based on the
export of raw materials. This creates a series of problems for Kazakhstan,
including whether the economic policy that the government began in 1995,
with full privatization and heavy foreign investment as its backbone, will
succeed in creating enough jobs and state revenue to tide the country over
until its long-range development plans can mature.

Interdependence with Russia

In the final years of the Soviet Union, Kazakhstan was the third largest
Soviet republic in terms of net material product (NMP) produced and the
fourth in industrial output.4 Kazakhstan was a major supplier of raw mate-
rials, agricultural products, and manufactured goods for the entire Soviet
Union. The World Bank has estimated the republic’s 1991 gross national
product (GNP) to have been $25.1 billion. This figure reflects Kazakhstan’s
contribution to the Soviet economy and does not readily translate into what
the GNP of Kazakhstan would be as a standalone economy. Approximately
40 percent of the republic’s GDP was derived from manufacturing, extrac-
tion, and processing. Kazakhstan was a major producer of iron ore, alu-
minum, heavy equipment, and rolling stock, and in 1989 Kazakhstan
produced about one-fifth of the USSR’s gold and coal. Because of the con-
tribution of its natural resource exports to the Soviet economy, Kazakhstan
provided implicit trade subsidies for other Soviet states. In 1990, implicit
transfers as a share of the GDP were measured at 7.4 percent for
Kazakhstan.5
In the Soviet period, the local elite rarely controlled facilities located
within a republic; only 8 percent of Kazakhstan’s economy was under direct
republic control, while Almaty shared control of 48 percent of the economy
with Moscow, and 43 percent of it was controlled directly by Moscow. The
latter included more than fifty factories belonging to the USSR’s military
industrial complex, which accounted for more than 11 percent of total
Soviet military production. The push for republic sovereignty brought
Kazakhstan’s party leadership into partial control of virtually all aspects of
the republic’s economy. Nearly two years after independence, however,
132 | Economic Development or Stealing the State?

President Nazarbayev admitted that there were two closed cities in the coun-
try that he learned about only after Russian Defense Department officials had
shut down their factories and their workers had gone home to Russia.
Soviet planners had little interest in developing the economy of
Kazakhstan as an end in itself, so the economic potential of some regions
was exploited while that of others was totally ignored. As already noted,
most of the republic’s manufacturing, mines, and processing facilities were
concentrated in the north and northeast and were interdependent with
those of southern Siberia. Kazakh coal helped to power Russia’s electric
grid, and its oil and gas went to Russia to be refined, while Kazakhstan’s own
refineries processed oil and gas from neighboring republics. Agriculture
was split between the north-central and southern regions, with grain con-
centrated in the former and the lucrative cotton and rice crops in the latter.
Again, economic integration made the grain growers reliant on elevators and
flour mills in Russia, while the southerners depended upon Uzbekistan’s
roads to transport their goods and service their economy.
At independence only 21 percent of the republic’s GNP derived from
intraregional trade, which accounted for nearly 90 percent of its total for-
eign trade, most of which was with Russia. As important as that trade was
in the aggregate, it was even more important in certain sectors, so that Rus-
sia was Kazakhstan’s sole customer for such commodities as iron ore, lead,
phosphate fertilizer, and heavy equipment, while Russia was the republic’s
sole or major supplier for such things as paper, timber, tires, most agricul-
tural equipment, and—even more important—oil, gasoline, and other
refined-petroleum products. While each could inflict damage on the other,
Russia had a far greater capacity to punish Kazakhstan than the reverse,
hence the Kazakh president’s strong interest in integration.
Russia’s special relation with Kazakhstan was transformed by the demise
of the ruble zone in November 1993. The new Kazakh currency, the tenge,
was formally launched on November 15, 1993. Kyrgyzstan, another impor-
tant trading partner, introduced its currency, the som, in May 1993, and the
Uzbek som came into use in June 1994. Russia’s leaders had hoped to bind
the CIS countries together with a single currency, which would have allowed
Russia to dictate economic terms.6 As the proponents of more radical eco-
nomic reform gained the upper hand in Kremlin decision making, these cal-
culations began to change, and the continuation of a single currency zone
was seen as a major cause of Russia’s hyperinflation.7
Martha Brill Olcott | 133

The collapse of the ruble zone created the first major economic crisis in
Kazakhstan, leading to the rapid and nearly complete collapse of cross-
border trade, crippling hundreds of interconnected industrial enterprises
and making thousands of workers redundant in the process. It also allowed
Kazakhstan to devise its own economic policy and gradually to substitute
cash transactions for barter trade. This also served the interests of Russian
reformers, who sought to establish economic domination over an integrated
economic space consisting of other reforming economies. In spite of the
wide fluctuations across the CIS in the value of the ruble, Kazakhstan’s gov-
ernment had been reluctant to introduce a national currency, despite the fact
that it was being pushed to do so by foreign advisers as well as its own
young Western-trained economists. The Kazakhs stayed with the ruble after
Russia freed prices on January 1, 1993, and even after Moscow withdrew
Soviet-era rubles from circulation in late July. The first action obligated
Kazakhstan to follow suit, to avoid a run on differentially priced products
(which would worsen existing shortages), while the second removed cur-
rency emission entirely from the republic’s control. Kazakhstan bargained
with Russia for either the right of emission or a reliable supply of the new
rubles, in return for coordinating its export policy, foreign borrowing, and
even its budgeting with Russia. In November 1993, Russia imposed the
further condition that Kazakhstan turn over its gold reserves, at which point
President Nazarbayev felt impelled to establish the tenge. Kazakhstan,
though, paid a price for its tardiness in leaving the ruble zone, as the coun-
try was flooded with rubles from CIS states that were preparing to launch
their national currencies,8 leading to an inflation rate of 2,500 percent in
1993.
The IMF-supported stabilization program, which was introduced with
the tenge, made controlling inflation a priority, and the government of
Kazakhstan has done well in meeting this obligation. Although during the
first year of the currency’s existence the dollar-tenge exchange rate depreci-
ated from the initial $1 for 5 tenge to $1 for 56 tenge a year later, the cur-
rency’s value gradually stabilized. The average exchange rate for 1995 was
$1 for 61 tenge, and the rate in mid-1996 was $1 for 67.2 tenge. The cur-
rency continued to depreciate over the next two years, dropping sharply fol-
lowing the Russian crisis of mid-1998, when it fell to $1 for 81 tenge,9 in
large part because trade with Russia still accounted for 31.5 percent of
Kazakhstan’s exports and 42.5 percent of Kazakhstan’s imports.
134 | Economic Development or Stealing the State?

In April 1999 the Kazakh authorities introduced a free-floating exchange
rate regime. As a result, the tenge depreciated by more than one-third by the
end of September 1999. President Nazarbayev was critical of this measure.
This was probably one of the reasons for the government shakeup in early
October. Many believe, however, that the tenge float helped to end the eco-
nomic recession and contributed to an economic growth rate of 1.7 percent
in 1999.10 Rising world commodity prices and favorable weather condi-
tions also played a part. Before the Russian crisis, Kazakhstan had been able
to maintain a steadily dropping inflation rate. Average consumer price infla-
tion was 1,880.1 percent for 1994, falling to 176.3 percent for 1995. Infla-
tion for 1997 was 17.4 percent, below initial IMF projections, and fell even
further to 7.3 percent in 1998.11 The sharp drop in the country’s inflation
rate was a direct result of the increased fiscal responsibility being exercised
by Kazakhstan’s government. The planned 1997 budget called for a spend-
ing deficit of only 3.2 percent of the GDP and a sharp cutback in the size of
the state administration when the government saw that these goals were
unlikely to be met. However, in 1999 inflation increased to 17.8 percent.12
The 1998 budget called for a consolidated fiscal budget deficit of 5.5 per-
cent of the GDP, but the decrease in government revenues caused by the
falling prices of Kazakhstan’s major exports, such as oil, made this target vir-
tually unattainable. The government was slow to react to this state of affairs,
finally announcing an austerity program on July 13 after much pressure
from Nazarbayev.13 Kazakhstan’s 1999 budget set the deficit ceiling at 3.7
percent of the GDP.14 The country’s 1999 budget deficit was 4 percent of the
GDP.15 By January 2001 the tenge traded at $1 for 145.4 tenge, and since the
August 1998 crisis Kazakhstan’s currency has depreciated only about half as
much as the Russian ruble.
Russia’s share of Kazakhstan’s trade is steadily diminishing. According to
the Kazakh Statistical Agency, trade turnover between Kazakhstan and Rus-
sia amounted to $2.46 billion in 1999, falling $82 million against the
amount in 1998.16 Yet by the end of the first quarter of 2000, Russia
remained the country’s most important trade partner, with a share in total
trade turnover of 28 percent (32 percent of imports and 25 percent of
exports).17
Russia’s withdrawal from Kazakhstan has been welcomed much more
than mourned, especially by a local elite that has gained a clear economic
advantage. By 1989–1990 the decay of central control and the attenuation
of intra-union economic ties created strong incentives for republic elites
Martha Brill Olcott | 135

and senior management with access to valuable commodities to bypass
Moscow and market their goods directly. The flood of money fell into pri-
vate hands when changes in Soviet legislation allowed commodities to be
traded through cooperatives and then through privately owned companies.
Initially this was done semiclandestinely, but after independence
Kazakhstan’s leaders were largely free to award the management of the coun-
try’s resources to whomever they chose, making it even easier for people to
turn political privilege into private fortunes, which were then put to use dur-
ing the country’s privatization campaign.
Public debt, however, continued to increase at a rapid pace in these first
years. No longer directly tied to the neighboring economies, Moscow was
free to charge escalating prices for its various sources of energy, which had
previously been supplied at fantastically steep discounts. The newly inde-
pendent states thus acquired ballooning bills that they were unable to pay.
By mid-1995, for example, Kazakhstan was importing about $1 million a
day of energy products, about 65 percent of it on credit from Russia. At the
same time it began to accumulate debt to Uzbekistan, which was the major
energy supplier for the southern part of the country.
At several points, Kazakhstan has had to swap equity in some of its state-
owned enterprises to meet this debt. In the case of the national power grid,
for example, half of the $663 million that Kazakhstan’s consumers owed to
the state power supplier in 1997 was in turn owed to Russia for payment
arrears. Kazakhstan cleared this debt with a $370 million debt-equity swap,
giving Russia ownership of one of the high-voltage lines running through
northern Kazakhstan and some equity in one of the republic’s generating sta-
tions.18 This fragmentation of ownership of the national grid complicated
later efforts to interest foreign investors in taking over other parts of
Kazakhstan’s major utilities. Kazakhstan’s energy interdependence with Rus-
sia has remained a problem, as has the accumulation of Kazakh debt. With
time, the focus has shifted from political actors to economic ones, as in Jan-
uary 2000 when it was the Russian energy giant RAO–UES (Russia’s Unified
Energy Systems), and not the Russian government, that acquired a piece of
the national Kazakhstan energy network in return for the forgiveness of
$239 million in debt to the Russian company.
A similar debt-equity swap occurred in the case of the spaceport of
Baikonur, which was the subject of protracted negotiations with Russia.
While Kazakhstan gained considerable foreign policy advantages from the
process, the final agreement reached for the space-launch facility passed
136 | Economic Development or Stealing the State?

full control of Baikonur and Leninsk, the support town, to Russia, includ-
ing legal extraterritoriality, in exchange for an annual rent of $115 million
(on a twenty-year lease). While Russia has offered Kazakhstan a greater role
in future commercial launches, the facility remains under nearly exclusive
Russian control, and the relationship has never been a very satisfactory one.
Until 1999 the Russian payment was offset by Kazakhstan’s debts, and the
Kazakhs prohibited Russian launches after major accidents. The crash of a
Russian Proton rocket booster in October 1999, scattering harmful debris
over the Kazakh steppe, sparked acute resentment. The Kazakh ban was
lifted only after Russia investigated the cause of the crash and paid com-
pensation.

The Privatization of Industry

Kazakhstan’s liquidity crisis created strong pressure for the government to
accept the advice of international experts and to privatize the economy.
While more tentative steps were taken previously, Kazakhstan’s current pro-
gram of privatization dates from 1995 when the government introduced a
staged policy to turn nearly all the country’s public assets into private ones,
a move that was designed to attract foreign investment, stimulate produc-
tion, and rid the state of responsibility for debt-ridden enterprises.
In the context of the breakup of the Soviet Union, Kazakhstan’s eco-
nomic collapse was neither unique nor especially severe. Industrial output
throughout the Soviet Union, including Kazakhstan, had been in persistent
decline (in real terms) since the early 1980s, providing one of the engines
driving first Yuri Andropov’s19 and then Mikhail Gorbachev’s attempts to
revitalize the socialist system. Beginning in 1990, however, and continuing
through the first years of independence, Kazakhstan’s industries went into
precipitous decline. Industrial production shrank by 25 percent in 1994,
and Kazakhstan’s GDP in 1995 was 31 percent below the 1991 figure.20
The desire to privatize the economy was an important complicating fac-
tor. Not surprisingly, given their economic inexperience with all but the
Soviet system, Kazakhstan’s leadership embarked upon privatization rather
gingerly. Privatization in Kazakhstan was done in several stages: the priva-
tization of housing using flat coupons (1991–1992), mass privatization
using investment privatization coupons (1993–1995), and finally, after the
government adopted a new full privatization program, the privatization of
Martha Brill Olcott | 137

individual projects (1996–1998). As a result, by 1999 the private sector
employed about 60 percent of the labor force.21 As of July 1999, 75.6 per-
cent of the economy was privatized, including 80.2 percent of small enter-
prises, 40.8 percent of medium enterprises, and 52 percent of large
enterprises.22 The process was not as equitable or as fair as had been hoped.
In fact, the Financial Times labeled the latest stage of privatization “the
Kazakh sale of the century.”23
The first stage of privatization passed with little public objection because
it consisted largely of turning state-provided apartments into the private
property of the occupants. Inevitably, there were inequities, most of them
the result of demography. The legacy of Soviet-era hiring and promotion
practices meant that a disproportionate number of the better apartments,
especially those in the capital, now belonged to Russians. Cultural differ-
ences also played an important role in job selection during the Soviet era,
resulting in what most observers noted as a disproportionate number of
stores and kiosks becoming the property of Slavs or Uzbeks and Uighurs,
all of whom had a stronger mercantile tradition than did the Kazakhs.
The second stage of privatization began in 1993 with the launching of a
government coupon privatization program for medium-sized firms and fac-
tories with more than 200 employees.24 It was then that the real stresses of
economic transition began to appear in Kazakhstan. A kind of “sponta-
neous privatization” (essentially a form of legalized theft) of salable com-
modities had begun even before the collapse of the USSR. This too favored
Russians, who were more likely than Kazakhs to be the managers of facto-
ries, mines, and warehouses. Now the Kazakh government would have to
ensure that the economic advantage shifted.
The Kazakhs chose a voucher system, which had been pioneered by the
Czechs and later also used in Russia. Vouchers representing a set value were
distributed to all the citizens of Kazakhstan, which they could deposit in one
of the many investment privatization funds (IPFs) established for the pur-
pose. The various fund managers would then bid for up to 20 percent of the
shares in the mid-sized enterprises that were offered at privatization auc-
tions, using their vouchers as initial capital. Fifty-one percent of shares were
to be auctioned, 10 percent were to be given to workers and staff, and 39
percent went to the government.25
The various IPFs were intended to function like a combination of gov-
erning board and mutual fund, protecting their members’ investments
while helping to encourage greater efficiency and probity in the various
138 | Economic Development or Stealing the State?

enterprises. When the first 3,500 enterprises were put up for privatization
in April 1994, 170 investment funds were already registered, which should
have given Kazakhstan’s citizens a wide choice. In fact, more than three-
fourths of the vouchers were in one-fourth of the funds, while half the
funds had a total of 4 percent of the vouchers. 26 More remarkable, perhaps,
is that one fund, Butya-Kapital, received nearly 10 percent of the republic’s
vouchers, making it by far the largest single actor in the second stage of
privatization.
This second stage strengthened the personal fortunes of the leading fund
managers, who went on to form Kazakhstan’s new economic elite. The over-
whelming majority of these men, such as Mukhtar Ablyazov of Astana Hold-
ing, who in 1998 was appointed the minister of energy, industry, and trade,
and Bulat Abilov of Butya Kapital, were ethnic Kazakhs.
Ordinary Kazakhs, though, were nearly as suspicious of privatization as
the Russians were, particularly as the rumors grew of closed auctions at
which state properties with deflated assessments were being sold and as a
new affluent elite began driving expensive new foreign cars and building
vast houses in and around Almaty. Many of the Communist-era legislators
who were still serving in Kazakhstan’s parliament began voicing public
outrage, especially those who had not directly benefited from the privati-
zation process. This pressure led to Prime Minister Tereshchenko’s dis-
missal in the fall of 1994, but the new prime minister, Akezhan
Kazhegeldin, was charged with pressing forward with full privatization
even more rapidly. He was also given the task of improving the foreign
investment climate, something the country’s legislature had been reluctant
to do. The Kazhegeldin government used the nine-month gap between
parliaments (1993–1994) to introduce laws through presidential decree
designed to make the privatization process more transparent and to protect
the rights of property owners, as well as to stimulate the development of
small- and medium-sized businesses. These decrees, in many cases pre-
pared in close consultation with international financial institutions, were
all reaffirmed by the new legislature.27 In March 1996, the government
declared that small-scale privatization in Kazakhstan was complete, with 93
percent of small enterprises in industry and agriculture in private hands.
By that time, the shares of 1,600 larger enterprises had been put up for sale
at twenty-two auctions. The shares represented the charter capital with a
nominal value of 1,261,500,000 tenge.28 According to then Economics
Minister Umirzak Shukeyev, in early 1997 there were 90,000 small- and
Martha Brill Olcott | 139

medium-sized businesses in Kazakhstan that, along with small traders,
employed 20 percent of the labor force, or 1.65 million people. Their eco-
nomic impact, though, was limited because small- and medium-sized busi-
nesses produced only 160 billion tenge worth of products, or some 10
percent of the GDP in 1996, accounting for 5 percent of exports and 15
percent of imports.29
The third tier of privatization, which was designed to privatize the largest
factories, was scheduled for 1995, postponed until 1996, and was still not
yet complete in late 2001. The republic’s mineral and petroleum wealth, as
well as industries deemed to be of national significance, were originally
intended to remain public property, but as the country’s financial crisis
deepened, some of these have been sold. This third phase has been termed
privatization through individual projects and case-by-case privatization.30
The companies were sold (or put under the management) of individual
investors, under an individually negotiated arrangement, making this the
most corrupt stage of the three tiers, in part because the enterprises on offer
were the republic’s largest and potentially most profitable. There were a
limited number of sources for the kind of capital required since most of the
enterprises had extensive debts and many also had unproductive attached
assets—such as day-care centers, hospitals, and apartment buildings for
their workers. Thus the government was willing to envision a kind of con-
cession—called a management contract—in which the government, or gov-
ernment-controlled companies, would find foreign partners to update or
renovate existing factories and to market the enterprise’s assets without fully
assuming its debts. This foreign partner would have first rights to purchase
shares from the government-controlled packets, and it was hoped that they
might do so if these enterprises were divested of their various social welfare
responsibilities and became profitable.
The use of management contracts began during the second stage of pri-
vatization, and between December 1994 and August 1996, the government
offered forty-two of these contracts. Many of them were suspect, but tens of
millions of dollars were invested in Kazakhstan that might otherwise have
been withheld. This included several contracts that went to the subsidiaries
of the Trans-World Metal Corporation (and its sister companies, Japan
Chrome, Ivedon International, and White Swan of England), which was a
group of largely Russian metal traders that took major positions in some of
Kazakhstan’s largest metal plants, including a giant aluminum smelter in
Pavlodar and a ferro-alloy smelter in Aksu.31
140 | Economic Development or Stealing the State?

The Trans-World Group was headed by David Reuben, an Israeli, who
was in business with the Chernoy brothers; the latter were reportedly tied
to organized crime.32 Trans-World was also said to enjoy the support of
Oleg Soskovets, former first deputy prime minister of Kazakhstan and then
of Russia, and he in turn was reputed to be on good terms with Akezhan
Kazhegeldin.33 Certainly, after Kazhegeldin’s departure, the fortunes of
Trans-World began to falter. One of the original partners, Aleksandr
Mashkevich, left Trans-World in a grab for company assets, in which he was
said to have brought in the Nazarbayev family as a silent partner.
The Kazakh government was able to declare the leases in default and
used this to political advantage after Nurlan Balgimbayev replaced
Kazhegeldin as prime minister. Trans-World Metals became a particular tar-
get and brawled with the Kazakh government in the courts of several
nations. The government’s endgame seemed clear, albeit unspoken, that
those close to the president should now benefit from these transactions,
although this has never been formally demonstrated. These management
contracts also had an impact on center-periphery relations since the oblasts
inherited many of the social obligations that were dropped by large
enterprises.
The management contract for Karaganda Metallurgical Combine
(Karmet) was also controversial. This giant steel mill was declared bank-
rupt and was then offered to Ispat, a largely unknown Indian steel pro-
ducer.34 Rumors that this transaction directly benefited Nazarbayev, who
worked in Karmet for five years (from 1965 to 1969), make the rounds
regularly, fed by the fact that the mill was set to be privatized after a $50
million payment by Ispat for a plant that had a $1 billion replacement
cost. Karmet was the sixty-seventh largest steel mill in the world at the
time of its privatization, with a capacity to be the twenty-fifth largest.35
Even working at half capacity, the plant accounted for 10 percent of
Kazakhstan’s GDP in 1995.36
The privatization of Kazakhstan’s most valuable assets remains both slow
and corrupt. While Nazarbayev instructed the cabinet to complete privati-
zation by July 1997, only 62 of the 194 enterprises listed for privatization
in 1996–1997 were actually offered for sale,37 in large part because the
enterprises continued to depreciate in value and few would pay the asking
price. In December 1998, for example, the Ust-Kamenogorsk Titanium and
Magnesium Plant was withdrawn from offer because its share price had
dropped to one-tenth the August 1997 value.
Martha Brill Olcott | 141

Still, the government’s intention throughout has been to complete the sale
of the country’s principal assets by gradually transforming them into open
stock companies. In 1997 the Kazakh government reorganized the country’s
stock market to facilitate the privatization of the country’s largest utility
companies, its principal bank, and some of its natural resources. This action
has yet to have the desired effect.38 The Law on Securities, the Law on
Investment Funds, and the Law on the Registration of Security Transac-
tions, all passed in 1996–1997, were designed to replicate the U.S. securi-
ties exchange legislation of 1933. The shares of thirteen large companies
were to be traded on the stock exchange by the end of the first year; but only
three companies were fully tradable by June 1998.39 The slow start-up of the
stock market was partly the result of Kazakhstan’s failure to create invest-
ment banks. As of the third quarter of 1998, less than 5 percent of the
country’s large enterprises had been privatized, as had 11 percent of its
medium-sized enterprises. By comparison, nearly 85 percent of all small
enterprises were in private hands.40 To compensate for the sluggish start, the
Kazakh National Securities Commission drafted another program for the
development of the securities market for 1999–2000, which reevaluated the
role of portfolio investments, attempted to create conditions favorable to the
demand and supply of securities, and tried to develop an oversight system.
This program also envisioned tax incentives for securities issuers and
assumed a high investment potential within Kazakhstan itself since the gov-
ernment estimated the population’s hidden assets at $3 billion.
The final stage of privatization was designed to achieve yet another goal
of the state, the privatization of the country’s pension system. Since 1998,
workers were to have the choice of investing their pension money, still to be
based largely on employer contributions, in the state pension fund or in pri-
vate funds. The institutional structure of the new fund system includes
accumulative pension funds, asset management companies, custodian
banks, and state regulatory bodies. Kazakh pension funds are divided into
private (PPF) and state (SPF) funds, and all are closed joint stock compa-
nies. According to the law, PPFs are allowed to organize as investment funds,
accepting clients regardless of their workplace, or as corporate PPFs serving
only the employees of shareholder companies. According to Prime Minis-
ter Tokayev, during 1998 and 1999 the country’s fifteen private funds and
a state accumulative pension fund gained about $400 million in invest-
ments.41 The new accumulative pension fund system (APFS) has helped to
support state borrowing, but it has done little to stimulate effective saving.
142 | Economic Development or Stealing the State?

Guidelines for the use of pension funds are still confusing, and an
announcement by the Ministry of Labor and Welfare that pension funds
would be used to modernize the Atyrau-Samara pipeline created a stir early
in 2000. The National Security Commission then issued a ruling that pen-
sion funds would not be invested in industry. Legislation requires that at
least 50 percent of a fund be invested in state securities, and currently 96
percent of the funds are in state securities.42
Many in Kazakhstan still view the new pension system with skepticism,
and most ordinary Kazakhs find it difficult to function in the private sector.
Anecdotal evidence suggests that those with medium-sized and even small
enterprises who lack official connections are at a disadvantage from the
start because of the difficulties of getting capital and the need to purchase
protection. In a recent survey by a high-level commission on corruption, 60
percent of the 250 managers of small- to medium-sized firms surveyed
admitted to having encountered extortion and bribery.43 Many shy away
from going into the private sector because they see the economy as corrupt
and believe that organized crime plays too great a role. In a study done by
Karavan in 1994, 64.5 percent said that the mafia exerted considerable
influence on the government, and more than 60 percent said that the mafia
either completely controls business or does so to a considerable extent (21.0
and 39.1 percent, respectively).44 It is interesting that organized crime is so
pervasive in Kazakhstan that the newspaper felt no need to offer any expla-
nation of who the mafia was, and the perceptions of its pervasiveness may
have limited participation in the private pension program. Only 18 percent
of the Kazakh work force signed up with private pension funds one year
after pension reform was introduced.45
Although further along than many other post-Soviet states, Kazakhstan’s
privatization process has been slowed by the government’s vacillation on the
question of what to do with the country’s natural monopolies. In February
1998 the privatization of Kazakhstan’s oil sector was suspended when the
government claimed that it could not find a suitable strategic partner for the
national oil company, largely because of the oil sector’s lingering transport
problem. Then, in December 1998, Nazarbayev announced that railways,
power transmission lines, and oil and gas pipelines must remain in the
hands of the government, and that the government had suspended the sale
of state-owned shares in Aktiubemunaigaz and Mangistaumunaigaz, two
state-held gas companies.
Martha Brill Olcott | 143

The government, though, continues its exhortations, and despite the
instruction that privatization be completed by the end of the year (mid-
December 1999), Kazakhstan’s total privatization earnings in 1999 (local
and national budgets) came to 35.8 billion tenge (approximately $250 mil-
lion), compared with a target of 61.2 billion tenge (approximately $430
million). This included the sale of a 16.7 percent stake in one of the blue
chip companies, Halyk Bank (the national savings bank), to a local finan-
cial sector consortium, Asia-Invest, which was priced at 1.38 billion tenge
($10 million). Once again, the Nazarbayev family is reported to be involved
in this group.
Privatization plans for 2000–2001 are not likely to open the economy
much. Although Prime Minister Tokayev stated early in 2000 that privati-
zation would be completed in 2000, Finance Minister Mazhit Yesenbayev
claimed that only 31 of the 215 companies slated for sale in 2000 were actu-
ally ready for privatization. Kazakhoil, KazTransOil (pipelines), 46
Kazakhstan Electricity Grid Operating Company (KEGOC), Kazakhstan
Temir Zholy (railways), and Kazaeronavigatsia are still not eligible for pri-
vatization, and only two of the ten blue chip companies initially earmarked
for privatization (Mangistaumunaigaz and Kazakhtelekom) had any real
chance of being privatized in 2000,47 and even they were not privatized. It
is also unclear whether these companies will be stripped of their assets
before sale, which has already happened in several instances. While the
state oil company remains a powerful economic force, in 1998 the govern-
ment sold Kazakhoil’s most promising asset, a 14.28 percent stake in the
Offshore Kazakhstan International Operating Company (OKIOC, now
known as AgipKCO),48 which will develop Kazakhstan’s sector of the north-
ern Caspian Sea.
Still, even with its scale-downed effort, Kazakhstan planned on earnings
of more than $400 million from privatization in 2000. The blue chip gov-
ernment program for privatization intended for 2000 seems certain to be
extended to 2001, including the sale of state shares (once again) in the
Aktiubemunaigaz and Mangistaumunaigaz oil companies, Kazakhmys
(Kazakhstan’s largest copper producer), Kazakhstan Chromium, Kazakhstan
Zinc, the Ust-Kamenogorsk titanium and magnesium enterprise, the
Sokolov-Sarbai mining corporation, the Kazakhstan Aluminum Company,
and also Kazakhtelekom and Halyk Bank.
144 | Economic Development or Stealing the State?

Foreign Direct Investment

Foreign investment goes hand in hand with privatization, and Kazakh offi-
cials plan for their country to receive about $70 billion in foreign investment
over a forty-year period, overwhelmingly in the oil and gas sector. But a con-
siderable portion of the country’s enterprises will never be profitable enough
to attract interest, something that troubles the country’s leaders, who would
like Kazakhstan to avoid the trap of becoming solely a producer of raw
materials. Yet it is not clear that they have the knowledge or the discipline
necessary to do this. Nazarbayev’s strategy plan, Kazakhstan 2030, sets the
goal of transforming the country into “a technologically advanced society
with well-developed information and telecommunication systems that sup-
port scientific and technological personnel.”49 The plan provides little direc-
tion, however, as to how this might be accomplished.
The Kazakhs had thought that the task of restructuring their diversified
economy would be easier than it has turned out to be. They knew that agri-
cultural reform would be contentious, but they erroneously expected the old
industrial framework to make way automatically for a new one. Kazakhstan’s
leaders had little understanding of how technologically obsolete their econ-
omy was, a situation that was aggravated by the departure of Russian (and
other) specialists. The emigration of these specialists had an impact on all
sectors of the economy. This left the country’s policy makers more eager than
ever to attract foreign investment, a task that was given over to the new
prime minister, Akezhan Kazhegeldin.
President Nazarbayev remained the standard bearer of the effort, outlin-
ing the areas of the economy that had the highest priority for foreign invest-
ment: energy, especially oil and gas; food processing (reflecting the fact that
Kazakhstan was a major food producer but had almost no capacity to process
its yield); gold mining and refining; and other nonferrous mining and pro-
cessing. The bulk of its attention was directed toward the United States and
Europe, casting itself as a Europeanized, quasi-democratic secular society that
afforded ready access to the markets of Central Asia and beyond. When
appealing to Korean, Japanese, and other Asian investors, Kazakhstan
stressed its Asianness, and its willingness to combine capitalism with author-
itarianism as some Asian tigers had. Kazakhstan courted Turkey and, to a
lesser extent, the oil states of the Middle East, reminding them of its shared
ethnic identity (with Turkey) and religious identity (with the other Muslim
states), without raising the specter of Pan-Turkism or Pan-Islam.
Martha Brill Olcott | 145

The policy of attracting investments in key spheres of production has
been relatively successful. From 1993 to 1999, Kazakhstan received $9.29
billion in FDI, about 53 percent of which went to the oil and gas industry;
most of the rest went to the steel, nonferrous metallurgy, energy, and other
industries. FDI totaled $1.36 billion in 1999, 84 percent going to the oil and
gas sector and 4 percent to metallurgy.50 The country hoped to attract $1 bil-
lion to $1.5 billion in 2000,51 and in the first quarter of 2000 FDI increased
by 30 percent over the first quarter of the previous year. In 2001, the EBRD
projected FDI will total $1.8 billion for the year.
The greatest number of foreign investment projects has been in the area
of import-export. Their average value has been small because they include
the so-called shuttlers, or petty traders, who provide a steady flow of con-
sumer goods into the republic. Others were substantial, especially in the
early years, when fortunes were made by selling down existing stocks of
metal, ore, or other commodities. A second type of joint venture has
involved the purchase and refitting of existing facilities. Kazakhstan has
attracted some of the world’s best-known companies, such as Samsung and
Philip Morris.52 Philip Morris now controls 80 percent of Kazakhstan’s
tobacco market and has been in the country since 1993. It opened a $340
million factory in 2000. Samsung has a 40-percent share of Kazakhmys
(Kazakh copper), a vertically integrated metals company. Another reported
success story is Glencore International’s takeover of KazZinc, a joint venture
created in 1997 out of Ust-Kamenogorsk Lead-Zinc Combine, the
Zyryznovsk Lead Plant, and the Leninogorsk Polymetallic Combine. The
Kazakh government retained 15 percent and gave Glencore 62.4 percent of
the project.53 Glencore is privately held by global commodities trader Marc
Rich, who is no stranger to the murky ways of the metals business in the
post-Soviet world. The project reported a net profit of $11.3 million in
1999, after which Glencore announced plans to invest $191.5 million over
the next five years, to be added to $110 million spent in 1997–1999.
Yet the number of success stories involving global actors is limited.
“Green field” projects comprise the third type of joint venture, involving
extensive retooling or, more often, establishing entirely new production
facilities. Many of the largest energy projects are in this category, and the
Kazakhs have had considerable difficulty attracting other types of projects.
The potential of the republic was recognized by foreign investors even
before the collapse of the USSR. Chevron Oil began negotiating for the
rights to develop Kazakhstan’s Tengiz oil field in 1990, although its
146 | Economic Development or Stealing the State?

agreement was not made final until 1993, a year when the country had
$1.3 billion in foreign investment. The firming up of plans for the devel-
opment of the Tengiz field stimulated further interest in the country, but
82.5 percent of the $660 million that Kazakhstan attracted in foreign invest-
ment in 1994 went to the oil and gas sector.
The government was concerned that the pace of investment was far too
slow to stem the country’s economic collapse. By 1994 more than half of the
republic’s enterprises had sharply reduced the length of their workweek.
Workers throughout the country were put on furlough; and workers were
often handed scrip, given a part of what they produced to sell as they could,
or most commonly, simply not paid at all for months at a time. Such maneu-
vers kept the official figures for unemployment low—under 7 percent in
1995—but hidden unemployment was widespread. The ethnic Russian-
dominated northern and eastern parts of the country were the worst hit. In
1994, for example, in the northeastern oblast of Pavlodar, 11 percent of the
industry was shut down entirely, while 10 percent made no profit, and
another 44 percent survived only by selling off their assets.
This collapse, and the fear that it would grow worse before it got better,
led Kazakhstan’s government to accept the IMF stabilization program that
was designed to support the introduction of the national currency.54 The
government also followed the guidance of economic experts from multilat-
eral organizations more generally,55 with the twin goals of speeding up pri-
vatization and establishing a more attractive climate for international
investment. In fact, almost every piece of economic legislation offered dur-
ing the second half of the 1990s reflected consultation with experts from one
or more of the multilateral financial institutions, who nonetheless rarely
felt that the Kazakhs were taking all their advice.56
Over the next several years the government tried a number of approaches
to improve Kazakhstan’s international image for potential investors so that
the country could reach beyond the oil and gas sector. The law on land,
passed in December 1995, reintroduced private land ownership, which was
not fully extended to agriculture until 2000, and even then important
restrictions remained, including that foreigners could not own land, which
limits their ability to recover capital after a failed investment.
A government contract with Mobil Kazakhstan Ventures Inc., confirmed
in May 1996, provided a preview of upcoming legislation designed to spur
investment, and in February 1997, the State Support for Direct Investment
law was passed. Among the law’s provisions were legal guarantees and
certain benefits and preferences for investors. During these years, the
Martha Brill Olcott | 147

Kazakh government also began awarding development rights to strategic
natural resources through tenders that were organized by international
financial experts, another action that was pursuant to the advice that the
Kazakhs had been receiving.
While the legal environment in Kazakhstan was certainly more support-
ive of foreign investment than that in Russia, there was still a critical need
to increase investor confidence. Kazakhstan’s government tried to address
this through a “one-stop shopping” program for foreign investors, creating
the State Investment Committee in November 1996. The committee took
over the task of organizing tenders and supervising the negotiation of invest-
ment terms (taxes, tax relief, and royalty payments) with foreign companies.
The streamlining of the investment process was strongly supported by most
international experts monitoring or advising Kazakhstan. This procedural
change substantially reduced the number of bureaucratic logjams that for-
eign investors faced. It did little, however, to create an atmosphere of trans-
parency, especially after Akhmetzhan Yesimov, a confidant and reputed
relative of Nazarbayev, was named the first head of the State Investment
Committee and the first deputy prime minister. It seemed as though the
process of influence peddling was being streamlined as well. Yesimov lasted
until February 1998, when he was appointed the head of the presidential
administration.57
Kazakhstan was also modifying the ownership terms available to for-
eigners. The necessity to meet its rising budgetary debt led the leadership
to sanction investment deals that provided immediate liquidity, even at the
cost of giving full ownership of a project to foreign developers. The result,
as Aman Tuleyev, then Russia’s minister for CIS Affairs, observed in 1996,
was that nearly all Kazakhstan’s industry had been handed over in whole or
in large part to investors from other countries.58 By 1998, mineral deposits
were being turned over in full as well.
The government continued to increase the incentives to foreign investors
even after economic conditions began to improve, in early 2000 offering
expanded concessions to those investing in priority economic sectors. In
addition to its well-publicized activities in the oil sector, the Kazakh gov-
ernment has made a strong effort to attract foreign investors to large min-
ing projects. In February 2000, Ispat-Karmet acquired the Lisakovsky
mining combine, and six months later the Kazakh government found a for-
eign buyer for its Vasilkovskoe gold deposit, which was turned over to
Israeli diamond dealer Lev Leviev. As always, the air was rife with rumors
of how those close to the president were benefiting from these transactions.
148 | Economic Development or Stealing the State?

While the changes in government strategy and tactics have led to
increased investor confidence, neither foreign nor flight capital is rushing
into the country. Most foreign investment projects have yet to yield sub-
stantial income (or new jobs) for Kazakhstan. This places the government
under continued pressure to sell off its resources to any available buyers,
transferring valuable reserves to exclusively foreign control and leaving the
treasury dependent on taxes and royalties not immediately forthcoming
because of the incentive packages offered to stimulate investment. All this
causes a disproportionate amount of official attention to the oil and gas
industry, where investors will pay big cash bonuses and signing fees at the
expense of planning for a more balanced form of development.

Oil and Gas Development

Foreign interest in Kazakh reserves was inevitable. The country has 70.52
trillion cubic feet of gas reserves and at least 16.4 billion barrels of oil
reserves. This latter figure might even triple when Kazakhstan’s offshore
reserves are fully proved.59 Many of these deposits will not come on line for
many years, and the reserves will not be transformed into production for
40 years. Kazakhstan’s goal is to produce 170 million metric tons of oil per
year by 2020, by which time the oil and gas industry are to be completely
privatized.60
Kazakhstan’s oil reserves have been the subject of grand geopolitics as
well as local political infighting. While the United States, Russia, Iran,
Turkey, and China have all lined up, trying to influence the shipment of
Kazakh oil, many actors within Kazakhstan have been struggling to bene-
fit from the country’s wealth as well. Many of these people have had con-
nections with American businessman James Giffen, who served as an
intermediary for Kazakhstan in many multinational oil transactions.61
Rumors of large bribes being paid to Kazakh government officials have
circulated for years. These went a long way toward substantiation when the
U.S. Department of Justice issued a request to the Swiss government to
report on the bank accounts of President Nazarbayev and two former prime
ministers, Akezhan Kazhegeldin and Nurlan Balgimbayev. The Swiss report
charges that these men took signing bonuses of $115 million offered by
Mobil, Amoco, and Phillips Petroleum and diverted them to personal
accounts.62
Martha Brill Olcott | 149

For U.S. officials, the critical question is whether American businesses
knew these funds were being diverted. That the Kazakhs would try to profit
from the foreign development of their oil should not be surprising, given the
pervasive environment of official corruption. Kazakhstan’s decision to seek
the foreign development of its oil resources through the creation of inter-
national consortia involved most of the world’s largest oil companies.63 The
strategy created numerous foreign stakeholders in the country’s govern-
ment as well as in its companies and many seeking ways to befriend the
regime.
The foreign development of the oil sector was facilitated by a June 28,
1995, law on oil and gas. While there is talk of Kazakhstan someday becom-
ing another Kuwait or even Saudi Arabia, for now Kazakhstan is just begin-
ning to exceed the late Soviet-era production figures in the oil and gas sector
and is a producer more on the scale of Yemen.
Whereas the republic extracted 25,823,000 tons of crude oil in 1990,
Kazakhstan produced only 22,990,000 tons in 1996 and first approximated
Soviet-era production in 1997, when 25,780,000 tons were extracted. Sim-
ilarly 7.11 billion cubic meters of gas were produced in 1990, compared
with 6.40 billion in 1996 and 2.72 billion in 1997.64 Oil production rose to
25,776,000 tons in 1997, and gas production rose to 8.115 billion cubic
meters.65 In 1997, the oil industry contributed about $400 million to the
country’s budget from income, royalties, and taxes. From 1997 to 2000,
crude oil production in Kazakhstan rose from 495,000 to 569,000 barrels
a day.66 Rising world oil prices made it more profitable to sell rather than to
refine the product, especially for those who were able to obtain existing
export contracts and resell the oil at world prices outside the country. This
left most of Kazakhstan’s refineries operating well below capacity, forcing the
government to ensure that Kazakhstan had an adequate supply of diesel and
other refined oil products by banning the export of lubricants until March
2000 and by setting an export quota for oil for 2000 at 22 million tons, or
440,000 barrels a day.
The greatest challenge confronting Kazakhstan’s oil and gas industry is
transporting the country’s resources to market. While Kazakhstan projects
six pipelines to be constructed by 2015,67 to date only one new pipeline
route has been agreed upon, that controlled by the Caspian Pipeline Con-
sortium (CPC), which did not begin even limited operation until 2001.
CPC is building a 1,580-kilometer pipeline, with an initial capacity of 28
million tons a year, or 560,000 barrels a day, from the Tengiz field in
150 | Economic Development or Stealing the State?

western Kazakhstan to the port of Novorossiisk on Russia’s Black Sea. The
total cost of the pipeline is set at $2.6 billion. The CPC project dates from
1993, and the pipeline was originally expected to be operational in Sep-
tember 2000. The first shipment of oil was sent along the route in March
2001, with the pipeline expected to be fully operational in October 2001.68
The Russians began blocking shipments of Kazakh oil almost immediately
after the first section was opened, however, allegedly because of a customs
dispute. Informed observers maintain that the real reason that shipments
through CPC were cut off was that the segregation of the higher quality Ten-
giz oil from that flowing through the rest of the Russian pipeline reduces the
value of what the Russians are themselves marketing.69 Before CPC was
operational, Tengiz’s production—7.5 million tons in 1997, 8.5 million in
1998, and 9.5 million in 1999, and 10.5 million in 2000—was transported
through Duybendi and Ali-Bayramly, where it was loaded onto rail cars and
shipped through Khashuri to the Georgian port of Batumi on the Black
Sea.70 The transit costs were much higher before the opening of the CPC
route.
Despite the difficulties, the Tengiz venture attracted $700 million of the
$1.5 billion that U.S. companies invested in Kazakhstan from 1993 to
1998.71 The high demand for the Tengiz light crude and favorable financial
projections led Chevron to boost the amount that will be invested in pro-
duction and have kept the company bullish on the project. In spring 2000,
Chevron bought an additional 5-percent stake in Tengiz from Kazakhstan,
bringing its ownership share to 50 percent, although the structure of own-
ership is such that Kazakhstan still retains effective control.
The difficulties that Chevron encountered in negotiations to get a pipeline
route to export Tengiz oil, though, helped to sour U.S. firms and the U.S.
government on the idea of Russia as a partner in Caspian development.
The original Soviet-era proposal for the development of Tengiz did not grant
rights for the transport of oil to Chevron. After independence, in June 1992,
these rights were awarded to CPC, which consisted of Russia’s Transneft (the
Soviet-era pipeline operator), Kazakhstan’s government, and an Omani
group.72
CPC seemed in no hurry to set attractive terms for the construction of
this pipeline. It initially asked Chevron to finance the construction of what
was then budgeted as a $2 billion pipeline, offering the American company
only 20 percent of the pipeline profits.73 By now, Russia’s leaders had real-
ized that they were losing control of resources in the newly independent
Martha Brill Olcott | 151

states, which were further becoming competitors for Russia’s own oil, gas,
gold, and other commodity markets. As the legal heir to the Soviet Union,
Moscow, in 1994, made a formal claim to part ownership of all the oil and
gas sites in the former USSR. Although Russia lacked a strong legal prece-
dent, it had numerous pressure points for advancing these claims.74
As a result of Russia’s efforts, the then-leading Russian oil company,
Lukoil, together with its U.S. partner, ARCO, purchased 5 percent of the
Tengiz project from Chevron for a seemingly discount price of $200 mil-
lion.75 At the same time, cash-strapped local officials from Atyrau (previ-
ously Mangyshlak) fought for another piece of Chevron’s investment,
arguing that the oil lay beneath their sands, thus making them entitled to a
portion of the proceeds to meet the region’s own pressing needs. Chevron
was forced to renegotiate several times, reducing its share of the eventual
profits with each rewriting. The transit issue was not resolved until 1996
when Mobil was brought into the Tengiz project to interject the capital nec-
essary to reduce the share of the Omani stakeholder.
During these years of negotiations, Russia tried to restrict oil and gas
development by invoking Soviet-Iranian treaties which Moscow held
required that Caspian reserves be developed through common consent.76
Teheran concurred. Azerbaijan, Turkmenistan, and Kazakhstan said that
they did not need Russia’s permission to explore on- or offshore deposits and
demanded that the Caspian be divided into national sectors that extended
out to the middle of the sea.77
Rising international interest in Caspian resources increased the confi-
dence of each of the Caspian states, and all three began to sell off parcels of
their offshore reserves to foreign investors. Azerbaijan was the first to aggres-
sively market its resources and presumed that a suitable pipeline route
would inevitably follow if enough foreign investment was forthcoming. This
helped the Kazakhs to develop the confidence to sell their self-declared
national sector of the Caspian. The Kazakhs set up the multinational
OKIOC—including Italy’s Agip, British Gas International (including BP and
Statoil), Mobil, Shell, and Total—to explore ten of the two hundred blocks
that make up Kazakhstan’s Caspian Sea shelf. In August 2001, OKIOC was
renamed AgipKCO (Agip Kazakhstan North Caspian Operating Company)
to reflect Agip’s status as sole operator. Faced with an effective fait accom-
pli from neighboring states, Russia gradually modified its position from the
common development of national zones extending 45 miles from the shore,
to the idea that there would be national sectors reaching to the middle of the
152 | Economic Development or Stealing the State?

sea with wide, 31-mile corridors of shared development.78 The latter formed
the basis of a 1998 bilateral agreement with Kazakhstan on the joint devel-
opment of their shared Caspian reserves, which Russia hoped would serve
as the basis of an agreement for all five states.79
This has yet to occur, and the bilateral agreement does not solve all
Kazakhstan’s problems since Moscow is still committed to the general use
of the sea’s water and undersea surfaces, meaning that all five states would
have to consent to any Transcaspian pipeline project. Moreover, Russia
remains opposed to the proposed oil and gas pipelines and is able to cloak
its position in environmental terms. Although no one would dispute that the
Caspian is a fragile ecological zone, Russia’s position is to its economic ben-
efit, reinforcing the need to ship fuels across Russia. By contrast, the U.S.
government is a strong advocate of Transcaspian oil and gas pipelines as a
way to make the Baku-Ceyhan pipeline from Azerbaijan to Turkey’s Mediter-
ranean coast (through Georgia) more commercially feasible. The gas pipeline
is designed to benefit Ashgabat, while the oil pipeline would move Kazakh
oil (particularly that belonging to AgipKCO) through Kazakh and Azerbai-
jani national waters.
The U.S. government has therefore been trying to push Kazakhstan into
committing oil export volumes to Baku-Ceyhan, without complete success.
Kazakhstan is a signatory of the four-state agreement of November 1999
endorsing the construction of the Baku-Ceyhan pipeline, signed before Pres-
ident Bill Clinton during the OSCE Istanbul summit. Unlike the Azeris,
however, who are looking to market their oil safely and if possible earn fur-
ther transit fees, the construction of the Baku-Ceyhan pipeline is not a pri-
ority for the Kazakhs. There has been much speculation about the kind of
oil commitment that Kazakhstan would offer, especially since it is not clear
whether the proposed pipeline is economically possible without a major
commitment by the Kazakhs. The Financial Times claimed that Kazakhstan
had earmarked 400,000 barrels a day of throughput, only to have
Nazarbayev deny the statement a few days later.80
The Kazakh position is that no firm commitment will be made until the
offshore blocks are proved and exploitation planned. The United States
continues to try to entice the Kazakhs into supporting a Transcaspian
pipeline and the larger pipeline project, which is now referred to as Aktau-
Baku-Ceyhan, after the Kazakh city. It has asked KazTransOil, Kazakhstan’s
state pipeline company, which is headed by Nazarbayev’s son-in-law Timur
Kulibayev, to be the operator of the Transcaspian leg to Baku. While Kaz-
Martha Brill Olcott | 153

TransOil, now a part of TransNefteGaz, had to be included in the scheme
since it is Kazakhstan’s designated agent for oil exports, the company is
reported to serve Nazarbayev family interests. Naming it project operator
might have been a subtle inducement for the Kazakhs to support the Baku-
Ceyhan route. U.S. administration officials have justified the decision as a
way to make TransNefteGaz more transparent.
Kazakhstan continues to hope that a new pipeline can go through Iran,
an easy and inexpensive routing for Caspian and western Kazakhstani oil.
The Kazakhs say that they will use any route made available to them,
including across Iran, but they are too dependent on U.S. goodwill to
push hard for such an option.81 Although the United States counsels
Kazakhstan not to ship through competing oil-producing states (both
Russia and Iran are in this category), the Kazakhs’ priority is to get their
oil to market quickly, which means that they are intent on maintaining
good relations with Iran and accepting attractive transit offers from Rus-
sia. The Iranian interest in Kazakhstan heightened as the Clinton admin-
istration drew to a close, raising the prospect that a new U.S.
administration might be more receptive to a diplomatic opening with
Iran, which is a virtual prerequisite for the international financing of a new
Iranian pipeline. A large Iranian delegation attended the April 2000
Eurasian Summit in Almaty that the World Economic Forum organized,
including First Deputy President Hossein Kazempour Ardebili. At the very
end of the year, the visit of Iranian Deputy Foreign Minister Sadyk Khar-
razi led to rumors that the Kazakh and Iranian governments had signed a
pipeline agreement for a 50–50 split ownership between them and a num-
ber of European oil companies.82
The Kazakhs have also been receptive to overtures from the Russian gov-
ernment. In December 1999, Vladimir Putin, then the Russian prime min-
ister, supported the CPC export pipeline as being of “exceptional
significance for Russia both from an economic and from a geopolitical point
of view.”83 Transneft also agreed to increase the volume of Kazakh oil
exported through Russia’s pipelines in 2000, to ship 8.5 million tons
(170,000 barrels a day) of Kazakh crude to markets outside the former
Soviet Union, up from a 1999 total of 7.5 million tons (150,000 barrels a
day). The Atyrau-Samara pipeline, Kazakhstan’s largest, has a maximum
annual capacity of 11 million tons, but there are plans to increase that to 15
million tons. The Russian government is eager to have Kazakh oil mixed
with the lower-quality Ural crude. If part of the AgipKCO oil is shipped
154 | Economic Development or Stealing the State?

through the existing Russian pipeline system, then conditions for CPC and
Tengizoil are likely to improve as well.
The Russian position is sure to evolve as more is learned about the size
and quality of the AgipKCO reserves from the exploration wells being dug.
There is often a lot of sulfur in Kazakhstan’s oil, which is difficult to elimi-
nate in offshore deposits, but if the deposit proves economical to work,
AgipKCO may need to commit to the Baku-Ceyhan route for at least part of
its oil, even if it is required to barge its oil across the Caspian. The devel-
opment of the AgipKCO deposit, however, is fraught with technical diffi-
culties. The project cannot be up and running until 2004–2005,84 and
probably not until 2006–2007 or even later, although by then the Western
firms will feel considerable pressure since the period for the tax concessions
negotiated as part of their production-sharing agreement will already be
lapsing.85
Geopolitical concerns combined with the slowness with which the pro-
posed pipelines were becoming operational led Kazakhstan to make plans
to ship its oil to market through China. In 1997, when the Chinese gov-
ernment promised that a $9.6 billion pipeline would be erected over a span
of eight years, the Kazakhs sold the China National Petroleum Corporation
(CNPC) a 60-percent stake in the lucrative Uzen field, an onshore deposit
second in size only to Tengiz, which Western oil firms had thought they
would be able to develop.86 The Uzen field (in Aktobe oblast) is some three
thousand kilometers from the Chinese border. In addition, CNPC promised
to build a 250-kilometer pipeline to the Iranian border.87
The China-Kazakhstan connection was reaffirmed in April 1999 when
President Nazarbayev and Turkmen President Saparmurat Niyazov
promised jointly to give priority to energy export lines through China in the
next century.88 Yet this statement was made in part to address rumors that
the Chinese would withdraw, as CNPC had raised Kazakh government ire
by laying off 2,000 workers. Finding business operations in Kazakhstan
costly, CNPC contributed only about 60 percent of the planned investment
in 1999,89 in what the Chinese have viewed as a project with long-term
rather than short-term potential. The Chinese government clearly did not
want to be excluded from Kazakhstan’s oil rush, but it is not interested
enough in this western neighbor to make the development of the Kazakh
field a priority. Increasingly this project is coming under the domination of
the U.S.-based Access Industries, founded by Russian émigré (and natural-
ized U.S. citizen) Len Blavatnik. Access is one of the owners of the Tiumen
Martha Brill Olcott | 155

Oil Company, just across the border with Kazakhstan, and is eager to ratio-
nalize these Russian holdings with the Kazakh ones.90
There has never been a shortage of interested investors in Kazakhstan’s
energy sector, and President Nazarbayev’s choice of former Kazakhoil head
Nurlan Balgimbayev as prime minister in 1997 was designed to capitalize
on this. Balgimbayev was a professional oil man who had worked in the
USSR Ministry of Oil and Gas before independence. While the development
of oil has been plagued by well-reported chronic transport problems, the
development of Kazakhstan’s gas sector has received less attention but has
had no less difficulty. The biggest gas project, the realization of the Karacha-
ganak field in northwest Kazakhstan, has been slow, again because Russian
interests have had to be accommodated. The field is estimated to have
reserves of 300 million tons of oil and gas condensate and 500 billion cubic
meters of natural gas.
Here, too, a large part of the problem has been difficulties involving
negotiations with Russia, in this case with Gazprom, which controls the
Orenburg condensate facilities to which Karachaganak traditionally is
shipped. Still, negotiations with the Kazakhs were also difficult, and the for-
eign partners—Texaco, Agip, British Gas, and Lukoil—did not complete the
negotiation of their production-sharing agreement with Kazakhstan until
1998, a task they had begun five years earlier. The consortium also plans to
open a gas processing plant (with a yearly processing capacity of 10 billion
cubic meters of gas) by 2005. Kazakhstan now imports more than half of the
gas it uses. Without a new pipeline system, southern Kazakhstan remains
dependent on Uzbek gas. For now, the Kazakhs are seeking ways to man-
age these relationships better. In December 2000, KazTransGaz, run by
Nazarbayev son-in-law Timur Kulibayev, signed a major agreement with
Russia’s Itera,91 setting high transit fees across Kazakhstan for the shipment
of Russian as well as Uzbek and Turkmen gas. The two will share the fees,
although the precise division has not been revealed. The partnership, how-
ever, offers sufficient promise that the two companies have agreed to the
reopening of a stretch of Soviet-era pipeline to provide extra capacity. The
foreign development of Karachaganak’s oil and gas fields was jump-started
by a December 1999 decision to build a pipeline linking the Karachaganak
to CPC. The 650-kilometer link will cost $440 million and have a capacity
of 140,000 barrels a day. Progress in developing Karachaganak can now be
expected, and production is set to reach nearly 200,000 barrels a day in
2002, with the total investment in 2000–2002 set at $2.1 billion.
156 | Economic Development or Stealing the State?

The reorganization of KazTransGaz in May 2001 further strengthened the
prospects of cooperation between Kazakhstan and Russia since all the forms
of transport for Kazakhstan’s oil and gas are now controlled by one company
and by the Nazarbayev family, although these assets have never been for-
mally privatized.92
Although control of the oil and gas industry remains a political plum in
Kazakhstan, it has yet to be transformed into a source of profit for the
Kazakh population. In 1998, the oil and gas sector accounted for less than
40 percent of the country’s exports. The oil sector itself was in a partial
state of collapse, with nearly a third of all workers in the oil sector unpaid
for the first half of 1998. Two of Kazakhstan’s major refineries (in Pavlodar
and Shymkent) were at a virtual standstill because they could not cope with
the high cost of processing local oil.93
The government has regularly promised to turn this situation around
and is now promising that the country’s oil wealth will be shared with the
population through the creation of a Norwegian-style national oil fund.
Part of the proceeds from the sale of the additional 5 percent of the shares
of Tengizchevroil to Chevron went to this fund.94 Even earlier, in its short-
term program for the development of the energy sector adopted in 2000, the
government called for energy independence for the republic, stable power
tariffs, the completion of restructuring of the sector, and the creation of
economic conditions for energy conservation.95 Meeting these goals will be
difficult, especially in the current atmosphere of perceived corruption and
increasing domination of the oil industry by leading political families.
Major Western oil companies investing in Kazakhstan’s giant fields have
little interest in engaging in the restructuring of the oil sector, but they want
to create new facilities and start-up projects. Smaller companies can be eaten
alive by the conditions of doing business in Kazakhstan. Take, for example,
the case of Hurricane Hydrocarbons, an Alberta-based company that bought
the rights to Kazakhstan’s Yuzhneftegaz in 1996 and with it the rights to
develop Kazakhstan’s Kumkol Munai, with its estimated 450 million barrels
of reserve, at a bargain price of $120 million. Three years later Hurricane
Hydrocarbons was on the verge of collapse, its chief executive officer had
been dismissed, and the company was forced to accept a Kazakh bank as a
partner in order to remain in business. This is partly because the manage-
ment of Hurricane Hydrocarbons did not fully understand that it was buy-
ing an oil company with substantial community obligations that operated in
a fixed market.96 Kumkol Munai oil went to the neighboring Shymkent refin-
Martha Brill Olcott | 157

ery (known as ShNOS for the Shymkent Kumkolneftetorgsintez refinery),
which purchased the oil at a discount price for distribution in southern
Kazakhstan and Uzbekistan. This relationship, compounded by the decreas-
ing price of oil at the time, led the company into debt, and Kazkommerts-
bank, one of the country’s leading banks and industrial conglomerates, which
by then owned the Shymkent refinery, offered the company a $7 million
loan. When the company could not repay it, as well as its considerable addi-
tional debt, it was forced to buy the Shymkent refinery for a third of the
shares of Hurricane Hydrocarbons and $54 million in cash.
Kazkommertsbank acquired the Shymkent refinery as part of a shakeup
in the oil industry that occurred after Prime Minister Akezhan Kazhegeldin
was removed from office. The refinery had originally been controlled by
Vitol SA, a Houston-based trading company, which lost control of the
project (then known as Vitol-Munai) for nonpayment of disputed taxes.
The local Vitol chief was fined $5.6 million and was even jailed briefly by
the Kazakhs.97 Vitol had bought the refinery in 1996 for a proposed $150
million investment and sold its shares in early 1998 for $60 million, the sum
of the original down payment.98 In fact, Vitol was not the original victor in
the tender but got the project when the Kazakh government and tender win-
ner Sampson Oil could not come to an agreement. Kazkommertsbank,
which had supervised the original tender, took over ShNOS at that time. It
was rumored that Kazkommertsbank had been participating in the venture
alongside Vitol from the start.99
This move was all part of a fight to create a role for Kazakh investment
in the oil industry, something that was strongly advocated by Nurlan Bal-
gimbayev, who was appointed head of Kazakhoil in early 1997. At the same
time, Kazakhstan’s Ministry of Oil and Gas, which Balgimbayev had headed
since October 1994, was dissolved. Ironically, Balgimbayev would be given
the task of promoting Western oil interests when he was prime minister in
October 1997. In 1992–1993, Balgimbayev, who had been associated with
the Tengiz project since its inception, spent time studying at the Massa-
chusetts Institute of Technology and then did a training stint at Chevron’s
U.S. headquarters.
Balgimbayev’s term in office was of limited success from the point of
view of the Western energy community, although the Kazakh oilman, said
to be from a family who had worked in Kazakhstan’s oil industry for several
generations, seems to have used the time for his own benefit. Claims of his
pocketing signing bonuses may never be substantiated, but there is no
158 | Economic Development or Stealing the State?

question that under his stewardship the Kazakhoil company diversified its
assets with a Ukrainian subsidiary (Ukrnefteprodukt) that owns 60 percent
of the Kherson refinery (in partnership with Russia’s Alliance Oil). It hopes
to use the Kherson refinery to form a Ukraine-wide dealer network. Kazakh-
oil also owns 86 percent of the Atyrau oil refinery, which it is refurbishing
in partnership with Marubeni of Japan. Its subsidiaries include Uzenmu-
naigas and Kazakhoil-Emba. In addition, it has stakes of varying sizes in
nine oil production companies.100
Balgimbayev succeeded in making Kazakhoil strong enough to be viewed
as a threat to Nazarbayev family interests. Nazarbayev’s son-in law Timur
Kulibayev, who left Kazakhoil to head KazTransOil, now part of
TransNefteGaz, has tried to undermine his former firm to make it little more
than a large, self-governing state-owned oil company that manages a packet
of government of shares, at least until the firm is returned to direct family
control. In June 2000, Nazarbayev’s nephew, Kairat Saltybaldy, became the
first vice-president of Kazakhoil as a step in this direction, and Balgimbayev
encountered stiff resistance over the acquisition of the Kherson refinery.
Although the deal stood, Kazakhoil had the range of its foreign activities
restricted.101
The Kulibayev group has also developed a cooperative relationship with
Russia’s Gazprom and is strengthening connections with Lukoil as well. The
group has also worked closely with Kazkommertsbank in recent years,
although the relationship has had its ups and downs. Kazkommertsbank
was originally organized to serve the interests of those close to Kazhegeldin,
but through partial reorganization it was able to accommodate itself suc-
cessfully to his departure. The chairman of the board of Kazkommertsbank
is Daulet Sembayev, the former head of the National Bank of Kazakhstan and
a Nazarbayev intimate. In the spring of 2000 Kazkommertsbank took con-
trol of the Pavlodar refinery, after the local government defaulted on a $10
million loan. The fight over the Pavlodar refinery was a lengthy one, and the
oblast unsuccessfully appealed to the central government to block the
takeover of the refinery, which had reverted to state control after a Western
investor, CCL Oil Ltd., was forced out.102
The clashing interest groups within Kazakhstan’s oil industry, which in
part mirror Kazakhstan’s clan divisions, add to Prime Minister
Kasymzhomart Tokayev’s task of trying to maintain a favorable investment
climate. Despite the oil industry’s need for capital infusion and technologi-
cal assistance, there is still a wariness among Kazakh officials toward foreign
Martha Brill Olcott | 159

investment in the oil industry. Foreign investors need to feel that they are
being treated fairly and not being forced into unprofitable relationships
with Kazakhstan’s rising oil oligarchs.103
Many of the challenges to foreign investment are not of Kazakhstan’s
making. Local policy makers cannot break the transportation deadlock on
their own. Even major changes in the international climate, which might
make Russia a more amenable partner or Iran a more acceptable one, may
not make it sufficiently profitable to develop some of Kazakhstan’s more
costly projects; only higher energy prices could do this. Low energy prices
will scare off diffident investors like Saudi Arabia’s Nimir Petroleum Com-
pany Ltd., which sold its share of the Buzachi deposit in 1998, but most of
Kazakhstan’s foreign partners are there for the long haul.

Problems for Foreign Investors

Kazakhstan will continue to have difficulty in securing and sustaining for-
eign investment, especially outside the oil and gas sector, until there is the
will at the top to regulate corrupt practices. In a 1999 poll conducted by the
Washington-based International Center for Taxes and Investment, 60 per-
cent of the businesses operating in Kazakhstan described the country’s
investment environment as negative.104
Kazakhstan’s government has not always kept to the contractual terms
initially offered to foreign investors, although there is more transparency in
business transactions than in many other countries in the region. Some of
the difficulties that foreign investors encountered reflect the learning curve
of policy makers in a newly independent state, when the government
decided it had somehow been “had” in the privatization process. In the
early years, a foreign investor might have found its contract pulled; today
the Kazakh government is careful to make its behavior consistent with the
provisions of Kazakh law and may offer the distressed investor redress in
the court system. This does little, however, to stimulate investment confi-
dence, given the growing environment of official corruption, which per-
meates the courts and Kazakhstan’s legal system. The situation is said to be
so bad that foreign companies unwilling to bribe judges ask the represen-
tatives of their embassies to sit in on court proceedings in the hope that a
diplomatic presence might prompt a Kazakhstani judge to render a fair and
unbiased decision.
160 | Economic Development or Stealing the State?

While the international press has highlighted a series of privatization
reversals in recent years, the Nazarbayev government is taking great pains
to retain an international image of being “investor friendly,” using Western
public relations firms to try to lay blame for the reversals on the Kazhegeldin
government. Stories of payoffs to Kazhegeldin circulated frequently in
Kazakhstan during his years in office.105 Aspersions on his character esca-
lated on the eve of his dismissal, when it was revealed that he had served as
a KGB officer for at least part of his career, until he was dropped in 1987 for
financial malfeasance.106 If anything, the problem of official corruption
seems to have grown worse after Kazhegeldin’s departure.
Kazakhstan’s corruption problem has been staggering. Kazakhstan is said
to have lost $500 million in 1996 alone in a transaction in the oil sector.107
Stories of bribes and insider deals involving Nazarbayev and his family
abound, giving an element of farce to President Nazarbayev’s very public
anticorruption campaign and his claims that corruption “threatens the exis-
tence of the state.”108 The “court” around Nazarbayev seems to thrive on
money skimmed from the foreign investment process, and when his circle
becomes too ostentatious in its spending, bad press must be contained,
such as after a January 1996 presidential visit to Israel when some of the offi-
cial entourage spent $250,000 on a shopping spree.109 In the aftermath, in
a very public effort to find a scapegoat, Chief Justice Mikhail Malakhov was
dismissed for taking more than $100,000 in bribes.110
By November 1997, things were so out of control that Nazarbayev
ordered high-ranking officials to declare all personal income and then
reportedly told them to return a third of what they had stolen. Little effort
was made to obtain compliance, however, and the tales of luxurious shop-
ping sprees remain common during Nazarbayev’s official travel. The Novem-
ber 2000 United Kingdom summit meeting was said to have been a bonanza
for several prominent London boutiques, some of which were commis-
sioned to make hundreds of thousands of dollars’ worth of items for
Nazarbayev to give to visitors.
It is hard to know how serious a problem insider trading is for those try-
ing to gain access to Kazakhstan’s key assets and whether government offi-
cials line their pockets as they make these decisions. Certainly, Almaty
usually buzzes with rumors of outstretched hands, and of businessmen
from countries with lax foreign anticorruption laws who are willing to fill
them. The pressure on foreign investors certainly increased in 1997 and
early 1998 when the Nazarbayev government pressed for donations to the
Martha Brill Olcott | 161

building fund for the new capital at Astana. The money collected was
rumored to far exceed the cost of the buildings erected.
Anticorruption campaigns have had a minimal effect on the conditions
that trouble foreign investors. High-level officials have periodically come
under attack for bribe taking but with little consequence. A case in point was
that of Vice-Premier K. Abdullayev, who was dismissed in mid-1992, pur-
portedly for having accepted a bribe of $1 million to block the advance of
negotiations with Chevron. After a short period in apparent disgrace, Abdul-
layev returned to the public arena as the head of an entrepreneurial group.
Deputy Prime Minister Asygat Zhabagin left office in 1993 because of
claims of official favoritism toward his family firm, Ansat, which was trad-
ing in Kazakh metals.111 Nothing was ever done to follow up on these
charges, and after several years of very successful business activity, Zhabagin
returned to government as the minister of industry in 1998. At that time he
was even entrusted with the supervision of the privatization process. But the
high and mighty do occasionally fall. The general director of Balkhashmed
(Balkhash Aluminum), for example, was charged with embezzling $7 mil-
lion of copper from his company, and two years later, in 1995, the chairman
of the Central Bank and then financial adviser to Prime Minister
Kazhegeldin, Galym Bainazarov, was arrested for offering a bribe to the inte-
rior minister, the country’s senior law enforcement official.112
Political infighting, though, plays a much greater role in the fall of senior
public figures than does serious government attention to the problem of offi-
cial corruption. Those on the outs politically are quick to have their finances
scrutinized. Communist Party presidential candidate Serikbolsyn Abdildin
has had his finances examined, as has Akezhan Kazhegeldin.
Although Kazhegeldin has certainly been hounded by the Nazarbayev
government, the former Kazakh prime minister may not be the innocent he
has claimed to be. Kazhegeldin appears to have accumulated a considerable
personal fortune, in part through contacts in the Soviet-era military indus-
trial establishment, including contacts in the security forces. Many of the
decisions made by Kazhegeldin were of questionable economic wisdom.
The case of the Trans-World Group already cited rapidly ballooned into a
major player in the world aluminum business with annual sales of $5–$7
billion.
Trans-World’s profit margins were helped by the extremely low prices at
which it purchased the Pavlodar and Aksu sites. Within months of taking
on management contracts for Pavlodar and Aksu, the Trans-World Group
162 | Economic Development or Stealing the State?

exercised its contract option to buy majority stakes in both for a total of just
$143 million.113 This price was markedly deflated, allegedly because the
government officials responsible for negotiating the sale of this state asset
were silent partners in Trans-World subcorporations. This rumor was fed by
the fact that among the top figures in Trans-World was Vladimir Lesin, a for-
mer engineer from Kazakhstan who in the late 1980s was Oleg Soskovets’
deputy at Karmet.114 Soskovets became the first deputy prime minister of
Kazakhstan, serving until October 1992, when he moved back to Russia to
take the post of deputy prime minister for industry, charged especially with
overseeing issues involving resource exploitation in the former Soviet
republics. Russian interior ministry officials later charged that Soskovets
was working on Trans-World’s behalf while working for the government.115
There has been much speculation about Soskovets’ relation to Nazarbayev.
The two knew each other for decades, since Nazarbayev’s days at Karmet,
and the Kazakh president may have helped Soskovets make his leap to
Moscow in 1991, when he was accused of stealing state and cooperative
property while the head of Karmet. The criminal case disappeared when
Soskovets was made the minister for metallurgy in the last cabinet of the
USSR.116
The Trans-World Group had little difficulty in creating a dominant posi-
tion for itself even after Soskovets left Kazakhstan, causing speculation that
Kazhegeldin took over as the protector of its interests. It is also hard to
believe that Nazarbayev or those close to him did not benefit from the
Trans-World relationship, possibly in the transport of metals because a
Nazarbayev family member was charged with issuing export licenses for
much of this period. Yet when the initial contracts with Trans-World were
drawn up, Nazarbayev perceived himself as dependent upon the goodwill
of the powerful Soviet-era military and industrial elite that dominated Russ-
ian and Kazakhstani metallurgy. By the mid-1990s, Nazarbayev felt much
more in control and demonstrated this by seeking to isolate Akezhan
Kazhegeldin, who if not Russia’s creature, was at least someone who allowed
certain Russian interests easy access to Kazakhstan’s market. As
Kazhegeldin’s influence waned, the Kazakh government began withdrawing
some of the Trans-World management contracts, most prominently the one
for Sokolov-Sarbai mining corporation. The metallurgical conglomerate
began to fight back, bringing suits in Kazakhstan as well as in U.S., British,
and French courts.
Martha Brill Olcott | 163

Management splintered, and the group favored by Nazarbayev reentered
Kazakhstan’s market as Kazakhstan Mineral Resources Corporation (KMRC)
registered in Switzerland. KMRC was dominated by three men, Aleksandr
Mashkevich, Fatakh Shodiev, and Almaz Ibragimov, who used their Eurasian
Bank as a holding company.117 Mashkevich, in particular, was known to be
close to the president and often travels abroad with him. He is said to be
close enough to go clothes shopping for the Kazakh leader at Versace’s in
London.118 So when 1997–1998 reorganizations turned the management of
the Trans-World empire over to KMRC, the perception that Kazakhstan’s
metallurgy industry was structured to serve the personal needs of the regime
was further strengthened. It came as no surprise when Kazakhstan’s supreme
court found on KMRC’s behalf in January 1999, and then again in July
1999, when it allowed KMRC to disregard a court order from the British Vir-
gin Islands that required that management of the disputed companies be
turned over to an independent manager. In February 2000, Trans-World set-
tled with Kazakhstan after the company received a significant payment to
terminate the litigation of an $800 million claim.119
Kazakhstan had much more difficulty casting itself as the wronged party
in its clash with Colorado’s World Wide Minerals, which lost its manage-
ment contract for the Tselinnyy Mining Chemicals Plant, a uranium pro-
cessing plant, in August 1997 and then filed a suit against the government
of Kazakhstan in a U.S. federal district court. Given the conditions that the
company encountered in Kazakhstan, it would have been hard for the Den-
ver firm not to be in at least partial default of its contract. Those trying to
run mineral extraction, processing, or other heavy industrial projects have
had to confront higher-than-budgeted labor costs, rising energy costs that
are often combined with simultaneous energy shortages, and some respon-
sibility for the social welfare obligations (the running of schools and hospi-
tals and the maintenance of housing) of the firm they have taken over. Any
default, however, usually gives the Kazakh government an opportunity to
renationalize a project. In the case of Tselinnyy, renationalization may well
have been the government’s goal from the beginning, because the Kazakh
government reversed itself and in early 1999 gave control of the project to
Lev Leviev of Sabton (now renamed KazSabton), whose growing activities
in Kazakhstan are detailed below. Leviev promised increased investment in
the project but effectively bought the rights to Tselinnyy for about $300,000
and roughly $3 million in debts and back wages.120
164 | Economic Development or Stealing the State?

Even murkier are the relations between Kazakhstan and Tractebel, the
Belgian energy group, which sold all its holdings to KazTransGaz, the state
gas company, for $100 million in 2000, $10 million down, the rest payable
over ten years. Tractebel had acquired a twenty-year concession for Almaty
Energy (Almatyenergo) in August 1996. The latter, formed to supply heat
and lights to Kazakhstan’s capital and surrounding area, sold its assets and
some debt to Tractebel for $5 million, plus a pledge to invest $270 million.
All told, Tractebel is reported to have paid $55 million to the Kazakh gov-
ernment through the Eurasian Bank, leading to rumors that these were
bribes for top-ranking Kazakh officials.121 Bank chairman Mashkevich main-
tains that this was a fee for services that his Albeli group provided in check-
ing and repairing gas pipelines.122
Tractebel got into trouble immediately after taking control. It frequently
operated in Kazakhstan at a loss and certainly never realized the 25-percent
profit guaranteed by its agreement. That first year, with winter approaching,
the Belgian firm discovered that it possessed antiquated generators and had
virtually no stocks of coal or fuel oil with which to run them. The mines
from which they had planned to buy coal had been privatized in the interim,
and even when a new price was finally agreed upon, delivery proved almost
impossible. It also proved difficult to substitute fuel oil, and Uzbekistan, the
major supplier of natural gas for the region, had cut off shipments because
of Kazakhstan’s nonpayment of outstanding debt. Tractebel was further
hampered by Kazakhstan’s widespread shortage of electricity. Even when
found, additional generating capacity was impossible to purchase because
the transmissions in southern Kazakhstan pass through western Kyrgyzstan,
which refused to cooperate with the arrangement.
The company became deeply unpopular in Kazakhstan. When Tractebel
took over, government figures put the total unpaid debt for the energy used
by domestic customers at about $663 million, or about 80 percent of the
total for all outstanding loans carried on the books of the republic’s banks.
The Kazakhs were used to getting energy almost for free and balked at pay-
ing market prices. A campaign to force the payment of past-due bills by
shutting off the power to debtors backfired when the company demon-
strated itself incapable of supplying energy even to those few who did pay
on time. When the first frosts began, Tractebel’s electricity was 36 percent
below peak demand, resulting in a pattern of brownouts and blackouts that
led many Almaty residents to live without electricity and fuel. Trying to
introduce Western management practices also proved disastrous. Exercising
Martha Brill Olcott | 165

its right to hire and fire, Tractebel sacked 500 employees, only to have one
of these commit suicide by setting himself on fire in front of the company’s
headquarters.
The relationship between the Kazakhstan government and Tractebel
became so tense that the company threatened to withdraw from Kazakhstan
in the first quarter of 1998 when it was effectively barred from introducing
even modest rate hikes. To forestall this, President Nazarbayev had the
Balgimbayev government issue a public apology, but two years later Tractebel
had had enough. In early 2000, it announced that it was withdrawing from
Kazakhstan, and a week later a municipal court authorized the seizure of
Tractebel’s property and six bank accounts belonging to its subsidiary, Inter-
gas Central Asia (ICA). Finally, in May 2000, a buyout agreement was reached.
Almaty Energy was turned over to Access Industries, headed by Len
Blavatnik. As already noted, Access is another of the companies that has
enjoyed a privileged position in Kazakhstan as well as in Russia. It has
strong ties to Mikhail Fridman and Peter Aven of Russia’s Alfa Group, shar-
ing ownership with them of the Tiumen Oil Company (TNK). Access Indus-
tries has been developing the Bogatyr coal pit in Pavlodar since 1996, and
in the fall of 1999 it received the rights to the Severny pit, which is owned
by RAO–UES. Access, which has periodically clashed with the local gov-
ernment in Pavlodar over taxation and social obligations, is part of the new
breed of companies that manages to be on good terms with any government.
Len Blavatnik has been rumored to enjoy a privileged relationship with
President Nazarbayev. Blavatnik has also managed to learn how to make the
U.S. system work for him as well. He and his family have been regular con-
tributors to the election campaign of U.S. House of Representatives Inter-
national Affairs Committee Chair Benjamin Gilman.123 Access and TNK
were also the beneficiaries of a controversial $500 million loan from the
Export-Import Bank of the United States (Ex-Im Bank) in which Halliburton,
Inc., received payment for services, and this at the time when Vice President
Richard Cheney was working as Halliburton’s chief executive officer.124
Other energy companies have tried to find ways to benefit from
Tractebel’s problems, including a U.S. firm, the AES Corporation, that has
held on to its investments in northern Kazakhstan, and AES-Ekibastuz,
whose local tax arrangements have had to be renegotiated to “adhere more
closely” to local laws.125 It is not uncommon for foreign investors to discover
that agreements negotiated under one legal regime must be renegotiated
when the laws change without warning.
166 | Economic Development or Stealing the State?

Kazakhstan’s gold industry has been particularly hurt by the loss of
investment confidence, which was compounded by the dropping value of
gold, the increased cost of energy and even of labor in the country, and for
the high cost and difficulty of transport into and out of Kazakhstan. The
result is that the major players in the gold industry have shunned perma-
nent involvement in Kazakhstan, and the country’s two major gold deposits,
Vasilkovskoe and Bakyrchik, are being developed by so-called industry
juniors of uncertain reputation.126 The country’s gold industry has been in
serious decline over the past decade. In 1997, Kazakhstan’s export of gold
and other precious metals was valued at $133.1 million and accounted for
only 2.1 percent of the country’s total exports.127 There was a partial recov-
ery in 1999 and 2000,128 but the increase in production came in part
through the rapid and inefficient working of the country’s biggest deposits
in ways that could reduce their ultimate profitability.
Vasilkovskoe, which is the most attractive project of Kazakhstan’s gold
industry, has been abandoned by foreign investors on at least three occa-
sions. First Australia’s Dominion Mining, a junior in the industry, was
given the mine but failed to meet the terms necessary to develop it. Then,
in 1995, Kazakhstan unexpectedly cancelled a tender for the mine that
had been organized by the European Bank for Reconstruction and Devel-
opment (EBRD), instead letting the site to the Canadian firm Placer Dome.
This action sent a considerable chill through the international investment
community since it suggested that the republic might no longer be play-
ing by the rules of international business. After paying a substantial
deposit for the rights to Vasilkovskoe, Placer Dome had second thoughts
about the details of the arrangement and withdrew. It was about this time
that stories began to surface about Grigori Loutchansky, the reputed Rus-
sian Jewish organized crime figure with operations in Russia and Ukraine.
Loutchansky was reportedly close to the Nazarbayev family and had been
promised a piece of the country’s gold industry.129 In the next year, the
mine appeared to have been let again, to the Teck Corporation, which then
withdrew when it could not reach an agreement on securing a reliable
power supply. The mine was then turned over to a Kazakh gold company,
Altynalmaz, which lacked the resources to expand the area under exploita-
tion substantially.
In September 2000, 60 percent of the shares in Vasilkovskoe were trans-
ferred to the Leviev group, controlled by Lev Leviev. Eighteen months ear-
lier, in the spring of 1999, Leviev had taken control of the Tselinnyy Mining
Martha Brill Olcott | 167

and Chemical Combine in Stepnogorsk, the second largest uranium-
processing facility in the former Soviet Union. Leviev is a Russian Jewish
émigré from Tashkent with considerable business ties in Russia.130 He has
considerable business interests in the former states of the Soviet Union and
is one of the world’s leading diamond cutters. His Kazakh projects were ini-
tially carried out in partnership with Arkady Gaidamak,131 who has been
tied to the arms trade in the post-Soviet states. It is still too soon to know
who will actually develop Vasilkovskoe, or how fast. Leviev associates were
awarded 60 percent of the project, but subsequent to the transfer, articles
appeared in the Russian press claiming that Vasilkovskoe was really held by
a firm from the Dutch West Indies.132
The history of the privatization of Bakyrchik is equally murky. In 1993
a joint venture of MinProc and Chilewich briefly took control of the project
and then in 1995 made way for Bakyrchik Ltd., a venture incorporated in
London that was put together to develop the project. The latter group was
bought out in stages by Robert Friedland, of both Ivanhoe Investments and
Indochina Goldfields, a U.S.-born venture capitalist who eventually took
Canadian citizenship and became infamous in the Canadian press for going
into the copper business with Burma’s military government. Friedland, who
has always maintained that he is an environmentally conscious investor,
took full control of the Bakyrchik project in 1996,133 agreeing to a 70–30
split with the Kazakh government and 100 percent of the profits until his
investment (which by 2001 reached $50 million) is returned. 134 When this
will be is hard to know, for the project was effectively frozen from 1998 to
2001, in large part because of the high cost of refining Bakyrchik gold
because of the high content of arsenic and carbon in the deposit. In total,
Kazakhstan’s government has reported receiving fees and signing bonuses
worth $35 million in connection with Friedland’s payment for the govern-
ment’s 60 percent stake in the Bakyrchik deposit.135

Current Situation

Nevertheless, the government has reason for some optimism. For all the
murkiness of doing business in Kazakhstan, foreign investment is still up
compared to that in other newly independent states.136 The economy seems
to have bottomed out, inflation is largely in check, and economic produc-
tivity is increasing. Moreover, unlike most of its neighbors, Kazakhstan has
168 | Economic Development or Stealing the State?

for the most part remained on good terms with the World Bank and other
international financial institutions.
Kazakhstan’s economy began to show signs of recovery in 1996 and early
1997; the GDP grew by 2.1 percent in 1997 and was projected to grow by
3.5 percent in 1998.137 Largely as a result of the Russian financial melt-
down in August 1998, Kazakhstan’s GDP declined by 2.5 percent in 1998.
It grew by 1.7 percent in 1999, however, and increased by 9.6 percent in
2000—higher than anticipated in earlier forecasts. In 2001, GDP was
expected to grow by approximately 9–10 percent.
Some argue that part of this increase in the GDP was an artificial prod-
uct of changing the actual economic indicators that were being used to
measure productivity,138 as well as the result of unexpected gains in the oil
sector. Given the declines that Kazakhstan experienced in the past decade,
a rapid increase in the value of its production creates the appearance of a
sharp upswing in productivity. The real test will be whether Kazakhstan is
able to sustain the increase in the GDP over time.
Economic recovery is not distributed evenly across the economy, either
geographically or by sector, and industry’s and agriculture’s share of
Kazakhstan’s GDP have both declined. Agriculture’s performance has been
particularly disappointing, and this sector still awaits fundamental restruc-
turing. Although formally privatized, agricultural remains organized around
former state and collective farms, which are increasingly inefficient. The
1998 grain harvest was about a third smaller than that of the previous year,
and climatic conditions explain only part of this decline.139 The harvest of
2000 exceeded government expectations, but some have cast doubt on the
accuracy of the official statistics and point to the growing indebtedness of
Kazakhstan’s private farmers as an indicator of the long-term problems that
lie ahead. Debt is turning many into tenant farmers.140 Foreign investors still
lack sufficient legal protection to invest in Kazakh agriculture, and they
cannot yet own land, only harvests, which leaves agribusiness as an area ripe
for investment by rapacious Kazakhs.
Kazakh livestock breeding is also in a continuing state of decline. It is
estimated that livestock numbers in 1999 were just 50 percent of their 1995
levels.141 Most of the decline appears to have been the product of an over-
all lack of capital available for investment in agricultural technology, as well
as of poor management and an overall lack of good feed and medicine. By
the end of the decade the situation had changed somewhat. A bumper crop
in 1999 that provided plenty of good feed, as well as a general rise in
Martha Brill Olcott | 169

demand, increased Kazakhstan’s sheep and cattle population by 1 percent
and the swine population by 10 percent in that year. Although lamb and
beef production continued to drop, small private farms, responsible for 97
percent of the pork production in 1999, produced 24 percent more pork
that year than in 1998.142
The situation in industry is mixed. Talk of developing Kazakhstan’s light
industrial potential remains just that—talk—and heavy industry still
accounts for about 85 percent of Kazakhstan’s industrial output.143 Still,
recovery in heavy industrial sectors has been very uneven, and in the late
1990s the government was still vacillating between fully freeing the market
and introducing greater state controls in an effort to jump-start the sluggish
sectors. In 1998 and 1999 the economic crisis grew so severe that the gov-
ernment began talking about a state plan for industrial development in
which many of the large heavy industrial enterprises would be kept under
government control and operated at a loss to keep the labor force employed.
By 2000 industrial production increased by 15 percent during the first nine
months. Given the previous level of collapse, however, this constitutes only
a very tentative recovery.
The consequences of the economic collapse that the country experi-
enced from 1993 through 1995 when the combination of hyperinflation
and cash starvation led enterprises to extensive bartering are proving long-
lasting, as has the interenterprise indebtedness that was in excess of $11
billion in late 1996.144 At that time, unpaid wages and pensions had
reached 40 percent of the GDP (about $1 billion), and it took until Janu-
ary 1, 2000, for the government to pay all government arrears in pensions
and state social payments. While the state debt has been formally dis-
charged, it was done in part by privatizing some of the debtor companies,
complete with debt.
Kazakhstan’s leaders recognize that increasing foreign investment is the
key to industrial recovery. To this end, with strong support from the World
Bank, Kazakhstan is developing a leveraged insurance facility for trade and
investment to insure foreign investors against corruption. The World Bank
has promised to lend Kazakhstan $50 million to cover future payouts,
which would be used to leverage as much as a further $200 million in
additional coverage from commercial insurers. This step alone will not sig-
nificantly raise investor confidence and is costly to companies since they
will have to pay between 1 and 5 percent of the value of their projects in
premiums.145
170 | Economic Development or Stealing the State?

The performance of Kazakhstan’s financial sector is more encouraging,
although it suffered during Russia’s financial crisis. Kazakhstan has been
doing a good job of managing its foreign debt and has been cautious about
additional borrowing. Official government figures put Kazakhstan’s interna-
tional debt at $1.94 billion in August 1998, and its internal debt at $1.04 bil-
lion.146 In December 1999, Kazakhstan secured a renewal of the IMF
three-year $453 million Extended Fund Facility (EFF) loan that was sus-
pended after the July devaluation of the tenge. The increase in world oil
prices, however, gave the Kazakhs unexpected income, and in May 2000, the
National Bank of Kazakhstan made an early repurchase of all outstanding bal-
ances owed to the IMF drawn between 1993 and 1998. Kazakhstan’s exist-
ing economic program, supported by the three-year EFF obtained in
December, remained in place, but Kazakhstan did not need to draw funds
under this arrangement, treating the EFF as a precautionary source of capi-
tal.147 Kazakhstan’s external debt payments in 2000 will total an estimated
$473.3 million, including $267 million in sovereign debt payments. Thanks
to high oil prices during this year, the government currently has no problem
generating sufficient revenue to make these payments.148 The republic is still
vulnerable to a trade imbalance with Russia, and the import side is driven in
particular by Kazakhstan’s dependence on foreign gas. The trade imbalance
with Russia was $345 million in 1998, a figure that dropped to $78 million
in 1999.149 Kazakhstan is always seeking a balance between a debt crisis and
an acute energy shortage. Gas shortages are a perennial problem. To have
enough fuel for the new capital city of Astana, supplies to the rest of Akmola
oblast were sharply cut in the winter of 1997. In 1998 a number of cities in
northern Kazakhstan had their power cut, and it was only in the last days of
2000 that officials in Uralsk made an arrangement with Russia’s RAO–UES
for a partial debt payment, ending several months of brownouts. The Kazakh
debt to Uzbekistan is equally burdensome. In autumn 1998 the regions in
southern Kazakhstan were paying their Uzbek suppliers 42 cents on the dol-
lar,150 and in 2000 Kazakhstan preordered only half the gas it needed, citing
high prices ($50 per thousand cubic meters, up from $35 the previous year).
Overall, conditions have not yet improved to the point where capital is
returning to the country, and even the official family is reinvesting on only
a limited basis. In addition to the billions of dollars that are rumored to have
left the country, the volume of shadow capital in Kazakhstan is estimated at
$1.5 billion to $3 billion, and President Nazarbayev has publicly claimed
Martha Brill Olcott | 171

that there is close to $2 billion in hidden savings within Kazakhstan.151 He
has asked for legislation to allow this money to be legalized without ques-
tion, stating, “Maybe we will be criticized [by the West], but in the end it is
our internal affair.”152
Kazakhstan today is an economic paradox, a place of great potential
wealth, that still has trouble meeting many of its immediate obligations, in
part because of the scale of corruption of those in and near power. By
November 2001 the situation with regard to corruption had grown so seri-
ous that a group of prominent young business people, including the head
of Kazkommertsbank, Mukhtar Ablyazov, and Bulat Abilov joined together
to form a new lobbying group called Democratic Choice of Kazakhstan to
try and press for greater transparency.
The republic’s leadership has taken great pains to attract foreign invest-
ment and support and has sporadically tried to be responsive to the needs
and interests of the international business community. The apparent reso-
lution of the pipeline question seems particularly likely to stimulate the
inflow of revenue that the republic desperately needs. At the same time,
however, the distribution of that income within the republic is going to
remain a pressing issue. If the republic’s economic recovery is distributed
across a wide enough cross section of the republic’s population, the eco-
nomic difficulties of the first years of independence are likely to become no
more than a memory, one of the inevitable birth pangs of a new state. How-
ever, if the republic continues to solidify the oligarchical pattern of income
distribution that has emerged in this period of transition, then the eco-
nomic and political outlook for Kazakhstan will remain clouded.
The Kazakh government decision to move to a market economy has had
political consequences, which in turn created new actors. The new genera-
tion of political elite is likely to come from the economic sector, a pattern
already developing. Ministry appointments are now made with an eye to
making sure that key economic groups are represented, largely because of
the forceful lobbying of powerful economic groups, such as Kazkommerts-
bank. The same pattern is found at the oblast level, where powerful enter-
prises are often able to capture posts in the local administration to protect
their own interests. The political and economic ambitions of these people
must be accommodated, but so too must those of the vast majority of the
Kazakh population, which has been left almost completely out of the coun-
try’s economic reform.
6

A Divided Society

azakhstan’s population has been surprisingly patient during a time of
K extraordinary political and economic stress. There have been no armed
conflicts or violent demonstrations, and only limited public protests. In
1997 it seemed the country would develop a massive strike movement, but
that potential challenge faded. Since then the government has managed to
quell public discontent with a minimal use of public threats and virtually no
overt displays of force.
At the same time, Kazakhstan’s social problems have grown faster than
the government’s ability to solve them. Social differentiation is proceeding
rapidly along a number of fault lines: rural versus urban, old versus young,
north versus south, and Kazakh versus non-Kazakh, to name some of the
most prominent. This has created much larger numbers and classes of peo-
ple than ever before who perceive themselves to be poorly served by their
political leaders.
While the government places increasing stress on the need for a national
consensus and social stability, the actions of the governing elite often stimu-
late social and even ethnic discord. They make no effort to draw the popu-
lation into a meaningful debate on how the country should be governed, let
alone involve them in the governing process. The ambitions of elite aspirants
are being handled little better than those of the masses. Instead, there appears
to be a growing separation between the governors and the governed.
For now the population seems little inclined to test the government’s
power, even though for most people independence has brought steadily
declining standards of living. Many still expect things to get worse before
172
Martha Brill Olcott | 173

they get better. The impact of the rising GDP has not been readily felt by
most of Kazakhstan’s citizens, and the government is growing better able to
control the illegal barter trading and off-the-books employment that many
Kazakhs depend on to make ends meet. The anticorruption effort also seems
to be targeting the less affluent, who lack political connections, rather than
the big offenders. In 1998 alone the “taxation police” filed 1,943 tax viola-
tion lawsuits, and 387 people were jailed for tax evasion.1 In 1999 the pace
of arrests increased, but during the first five months of 1999 Kazakhstan’s
courts convicted only forty high-ranking officials,2 and none of these arrests
or trials involved those close to the president. In 1999, Kazakhstan’s pros-
ecutor general claimed that corrupt practices have cost the economy some
1 billion tenge.3 This excludes the hundreds of millions of dollars of flight
capital, much of which is held by the Nazarbayev family.4
So while the government formally registers the proper level of concern,
its actions often belie the image such concern is intended to create.
Accounts of bribe taking by government officials are commonplace in
Kazakhstan, and the seeming futility of doing anything about it is under-
scored by signs of the growing role of the Nazarbayev family in the activ-
ity. All this contributed to the June 2000 Transparency International
ranking of Kazakhstan eighty-sixth of the ninety-nine nations listed in the
Corruption Perceptions Index.5
Anecdotal evidence suggests growing public apathy about the govern-
ment. The divisions in society seem to be deepening as a feeling of power-
lessness spreads. Administrative redistricting has done little to smooth the
country’s geographic divisions. The north and south are still distinct, as are
western and central Kazakhstan. To some extent, these geographic divi-
sions are reinforced by clan differences; the west and center belong to the
Small Horde, the north to the Middle Horde and to the Russians (termed by
some as the Fourth Horde), and the south to the Great Horde. Clan mem-
bership in Kazakhstan, however, is not as powerful an indicator of behav-
ior as is ethnicity, which is seen as the most important determinant of future
success. The rise in the importance of religion has further accentuated eth-
nic differences. By contrast, economic factors have had a mitigating effect.
The state’s increasing withdrawal from the social service sector has led to
greater differentiation in the standards of living between urban and rural
Kazakhs. The chasm between rich and poor is even more prominent and is
beginning to transcend ethnic and regional lines, although it has not offset
the radicalization of the population along ethnic lines.
174 | A Divided Society

The Kazakhification of Kazakhstan

Changing Demography

Kazakhstan is becoming increasingly more stratified along ethnic lines, yet
the society is becoming less multicultural and less European over time. In
large part, this trend toward homogeneity is because the demographic
makeup of the population is changing.6 Outmigration and the natural
processes of aging have tipped the demographic balance incontrovertibly in
the direction of the Kazakhs, who began claiming to be an absolute major-
ity of the republic’s population in 1997.7
Russian settlement in Kazakhstan was mostly the product of Soviet poli-
cies, although there has been a Russian population in Kazakhstan since the
sixteenth century. In 1926, at the time of the first full Soviet census, Russians
accounted for 20 percent of Kazakhstan’s population. By 1939 they consti-
tuted 40 percent of the population, largely because of the disproportionately
massive losses that the Kazakhs suffered during collectivization. The high
birthrate of the Kazakhs (their families are traditionally about twice the size
of Russian ones) kept them from losing too much more ground against the
Russians, but in the 1959 and 1970 censuses the Russians continued to
account for 42.7 and 42.4 percent of the population, respectively. The Vir-
gin Lands drive led to part of this increase, when the Kazakhs were pushed
into the southern and western parts of the republic to make way for incom-
ing Europeans. The rest of the Russians came with the expansion of
Kazakhstan’s industrial and resource extraction base in the late 1960s and
the early 1970s. Beginning in the mid-1970s, the Russians began to leave
Kazakhstan at a faster rate than they were moving into the republic, a trend
that further accelerated with independence.
In the 1979 census the Russians still accounted for 40.8 percent of the
population. It was not until the 1989 census that the Kazakhs constituted
a greater percentage of the republic population than did the Russians—
39.7 percent as opposed to 37.8 percent. The Kazakh share had grown
from 30.0 percent in 1959 to 32.6 percent in 1970 and to 36.0 percent in
1979. Even with this growth, relative and absolute, at the time of indepen-
dence the Kazakhs still made up only about 40 percent of the population in
seven of the country’s nineteen oblasts and were outnumbered by the Rus-
sians nearly three to one in their new nation’s capital and in three other
oblasts (North Kazakhstan, East Kazakhstan, and Karaganda).8
Martha Brill Olcott | 175

The population makeup has continued to change since independence,
with the Kazakhs accounting for a growing percentage of the population,
both in the country as a whole and in the oblasts where they were most
underrepresented. There has been a substantial movement of ethnic
Kazakhs back to their ancestral regions, especially in the northern and
northeastern parts of the country, which has occurred with strong but
unstated government support. The Kazakhs, for example, accounted for
73.5 percent of those who migrated within the country in the first quarter
of 1998.9 The administrative reorganization of 1997 increased Kazakh rep-
resentation in several oblasts. In 1999 there were still eight oblasts in
Kazakhstan, in which the Kazakhs were a minority of the population, as
compared with ten such oblasts in 1989 (using current boundaries).10 Eth-
nic Russians, though, still dominate most of Kazakhstan’s principal cities,
and in Karaganda, Kostanai, and Pavlodar, the Kazakhs still account for less
than a quarter of the population.11
The Kazakhs are reproducing faster than the Russians, although the
country’s birthrate has declined since independence, this in spite of officially
sanctioned efforts to encourage the Kazakhs to have large families.12 The
Demography Fund, for example, created by a group of Kazakh businessmen
in March 1999, offered the parents of the first 2,000 babies born after the
new year a 100,000 tenge (about $1,500) bonus. The donor companies,
which include Kazkommertsbank, claim to have the backing of Kazakhstan’s
first lady, Sara Nazarbayeva.13 The bonuses were offered to everyone in the
country, but the public relations effort attached to the campaign made it
clear that the focus was on strengthening the Kazakh family.
Everyone living in the country knows that many Russians see themselves
as having no future in Kazakhstan, and the departure of nearly a quarter of
Kazakhstan’s Russian population, mostly back to the Russian Federation, is
the single biggest factor in the country’s shifting demography. Russian
sources claim that 1.1 million Russians left the country from 1988 to 1998.14
Kazakh sources offer an even higher figure and a somewhat different
timetable for the Russians’ departure. According to Kazakhstan’s official sta-
tistical agency, a fairly steady outmigration took place until 1994, when it
rose sharply and then began to drop again, with a total of 1.5 million Rus-
sians leaving the country from 1992 to 2000.15
The departure of this Russian population contributed to a decline of
44.2 percent in the number of skilled workers from 1985 to 1993. The
losses were far greater in some oblasts than in others. Karaganda, for
176 | A Divided Society

example, succeeded in keeping its labor loss to only 35.1 percent, while in
Almaty oblast the loss was 65.4 percent, in Akmola 59.8 percent, and in
Zhambyl 50.5 percent.
The Russians are still coming into the country as well. From 1991 to
1998, some 375,378 people arrived in the country beyond the government
quota, of which about 250,000 were Russians.16 About half of these are
said to be people who moved to Russia and then back to Kazakhstan, and
the remainder have come from neighboring Central Asian countries.17 This
Russian population does not qualify for government assistance, but it does
bring expertise back into the economy.
By contrast ethnic Kazakhs are being encouraged to return to Kazakhstan
and are initially supported by a state fund that provides money for the reset-
tling of Kazakhs returning to their motherland. The in-migration of Kazakhs
has been more of an irritant to interethnic relations than it has been a source
of demographic change. Between December 1991 and December 1998,
approximately 170,000 Kazakhs migrated to the country,18 with the num-
bers dropping off sharply thereafter.19 This number includes those Kazakhs
returning from other CIS states who are not eligible for assistance programs
for which other Kazakhs (referred to as oralman) returning from Mongolia
or China do qualify. This is but a small part of the Kazakh diaspora. One
Kazakh social scientist estimates that there are 4.1 million ethnic Kazakhs
currently still living abroad, including 1.5 million in Uzbekistan, 740,000
in Russia, 70,000 in Turkmenistan, 1.5 million in China, 80,000 in Mon-
golia, 30,000 in Afghanistan, and 25,000 in Turkey.20 Moreover, some
sources report that more Kazakhs have left Kazakhstan since independence
than have returned, that 210,000 left the country from 1992 to 1998, while
others place the figure at about a third that number.21
The Kazakhs were initially enthusiastic about resettling their kin from
Mongolia and displacing local Russians in the process. The efforts to absorb
Kazakhs from Mongolia, China, and Iran, however, showed to all but the
most intransigent nationalists how much the Kazakh culture has been
shaped by decades of living in a Russian-dominated society. While the intro-
duction of sixty thousand nomads from Mongolia has helped to tip the
demographic balance in a few largely ethnic Russian enclaves such as East
Kazakhstan oblast (formerly Ust-Kamenogorsk), the local Kazakh authori-
ties found that large cultural and linguistic differences made the assimilation
of these returnees almost prohibitively expensive.
Martha Brill Olcott | 177

Seventy years of Soviet rule left Kazakhstan’s Kazakhs closer to the Euro-
pean-dominated global culture than to their own nomadic past. This obser-
vation has not escaped the country’s Russian population and leaves them
troubled by what they see as Kazakh efforts to turn Kazakhstan into an eth-
nonational state. While the country’s elite is 80–90 percent Kazakh, the
Russians are still the backbone of the country’s middle class, although this
is changing. The Russian population is older on average than the Kazakh
and has a lower birthrate. The natural decline of the Russian population will
only continue over time since younger Russians, and especially those with
families, are leaving the country in disproportionate numbers.
The outmigration of other ethnic groups has also made Kazakhstan more
mono-ethnic. About two-thirds of Kazakhstan’s German community have
left the country over the past decade, some six hundred thousand people,
and about a third of the Ukrainian population (three hundred thousand
people) have left Kazakhstan as well.22 The departure of the Germans is
really something of a special case since the relocation support provided by
the Federal Republic of Germany creates strong economic incentives for
seeking the “restoration” of citizenship. The decision to leave for Ukraine is
much like that of choosing to go to Russia and carries no certainty of eco-
nomic benefit.
Many of Kazakhstan’s Slavic population seem to feel that they have
sharply diminished economic prospects if they remain. A recent study of
Kazakhstan’s Russian population, by Galina Vitkovskaya for the Carnegie
Moscow Center, found that roughly a third of those interviewed would like
to leave Kazakhstan permanently; of those, 40 percent had concrete plans
to leave the country over the next five years.23 Most people who were plan-
ning to leave wanted to do so because of a fear for their economic future (29
percent) or from a concern for the future of their children (48 percent).
Explicitly ethnic motives were cited in only 29 percent of the cases,24 but in
the context of Kazakhstan, most people always see ethnicity as linked to
their prospects of employment.

Language Matters

Russians and other non-Kazakhs feel discriminated against by the govern-
ment’s language policy, which forces their children to master Kazakh and
limits their own participation in the public sector if they are not fluent in the
178 | A Divided Society

language.25 While Kazakh nationalists feel that the government should do
more to bar those who do not speak Kazakh from public life, including pre-
vent them from serving in the legislature, most of Kazakhstan’s citizens
seem willing to accept a continued public role for the Russian language,
greater even than what the government is willing to grant. According to a
public opinion poll in the mid-1990s, 56 percent of the country’s citizens
believed that Kazakhstan should have both Russian and English as the state’s
languages; 29 percent believed that Kazakh should be the only state lan-
guage and that Russian should have legal status as the language of intereth-
nic communication; only 4 percent believed that Kazakh should be the only
state language; 4 percent believed that Russian should be the state language;
and 7 percent believed that there should be no state language.26
No one expects Russian to disappear from public life, and according to
the 1999 census, more people are still fluent in Russian than in any other
language, 75 percent of the population in all, including 67.4 percent in the
rural areas.27 Russians, though, fear that their language will be degraded by
the emphasis on developing proficiency in Kazakh. Some of that fear is
warranted. The number of Kazakh language schools is on the rise, while the
number of Russian language schools is declining. In 1991, there were only
2,768 Kazakh schools (34 percent of the total), but by September 1999
they numbered 3,357. Over the same period, the number of Russian schools
declined from 3,641 to 2,412.28
The language policy has created real dislocations in the education system.
It is already burdened by the requirement to translate or write textbooks,
technical manuals, and other materials in Kazakh. Much of the responsi-
bility for compliance with the language laws falls on local authorities, who
struggle with the demands of finding people competent to teach technical
subjects in Kazakh, as the curriculum now requires. Teacher training is
expensive, and the profession is low paying, making it difficult to attract
young people. The curriculum requirements—such as the October 1, 1999,
order that those schoolteachers in West Kazakhstan oblast not proficient in
Kazakh enroll in language classes—may serve as formal compliance, but
they do not produce competent bilingual faculty. Local school officials also
find it tempting to assign Kazakh speakers to teach in fields beyond their
expertise, simply in order to offer the mandated courses. Even those fluent
in Kazakh often lack the technical vocabulary necessary to change their
language of instruction, as most Kazakhs received their higher education in
Russian.
Martha Brill Olcott | 179

Russian still remains the dominant language of higher education, and in
1999, 72 percent of college students pursued a course of study taught in
Russian, 27 percent in Kazakh, and 1 percent each in Uzbek, English, and
German.29 Many people, however, have difficulty in finding instruction in
their preferred language, both in primary and secondary schools. Accord-
ing to a 1997 poll, three-quarters of the population throughout northern
Kazakhstan and nearly one-half in the ethnically Kazakh-dominated west
and south wanted to be educated in Russian. By contrast, under 25 percent
of the Russian-dominated population of northern and eastern Kazakhstan
wanted to be educated in Kazakh.30
As already pointed out, Russians often say that they there is no real rea-
son to learn Kazakh, because even if they master the language, they will still
have no real future in the country. The pervasiveness of this kind of senti-
ment is probably why the percentage of Russians with Kazakh language
ability effectively remained steady in the mid-1990s, dropping slightly from
8.5 percent in 1994 to 7.7 percent in 1996.
Kazakhstan’s Russians are finding it difficult to build strong emotional ties
to their new country. According to a 1998 poll by Kazakhstan’s Parliament
Information Analysis Center, around 46 percent of the country’s Russian
population still considered the former Soviet Union, and not Kazakhstan, to
be their motherland, and less than 15 percent believed that adaptation to life
in independent Kazakhstan was possible.31 The authors of another 1998
study, this time of university students in Almaty and Astana, found that,
respectively, only 33 percent and 39 percent of the Russians sampled
planned to stay in Kazakhstan,32 while just under 15 percent of the young
Kazakhs surveyed said that they planned to leave the country.33
Although the emphasis on Kazakh language education may be ensuring
the future of the language, it is also creating a new kind of generation gap.
By some estimates, as many as 40 percent of the adult Kazakh population
have not fully mastered the language. Such a generation gap has the poten-
tial to cause rifts within the ruling elite.34
Much depends upon the definition of language mastery offered, and
Kazakh parliamentarians have been struggling with the problem of choos-
ing an appropriate standard. According to a 1996 commission on language,
if mastery is defined as the ability to make oneself understood in spoken
Kazakh, then 96.3 percent of ethnic Kazakhs could be said to speak Kazakh;
however, if mastery is defined as the ability to read, write, and speak fluently,
only 74.7 percent could be considered to have mastered Kazakh.35 Many
180 | A Divided Society

prominent Kazakhs do not read and write Kazakh well and so are unable to
edit Kazakh texts properly. In August 2000, the politically ambitious Kazakh
deputy Serik Abdrakhmanov took the government to task for the Kazakh-
language text of a bilateral agreement with Iran on combating crime that was
signed by Prime Minister Tokayev. According to Abdrakhmanov, who
branded Tokayev and his co-signer, Foreign Minister Erlan Idrisov, as “illit-
erate,” the agreement contained no fewer than 150 spelling and grammati-
cal errors.36 Even at the highest levels, it seems, true mastery of the Kazakh
language is rarer than the statistics show.
The requirement of demonstrating language proficiency is a ready tool for
political exclusion. The emphasis on Kazakh language proficiency works to
the benefit of those from the Great Horde who are more likely to be fluent
in Kazakh, and it places not only Russians but also many Middle Horde and
Small Horde Kazakhs at a competitive disadvantage.
The language laws have yet to be invoked in high-stakes political games,
as they were in the 2000 presidential election in neighboring Kyrgyzstan
when President Akayev’s principal political opponent, former Vice President
Feliks Kulov (an ethnic Kyrgyz) was barred from running for president
because of a rigorous and arbitrary Kyrgyz language test that was required
of all candidates. In fact, President Nazarbayev has taken pains to demon-
strate sensitivity on the language issue, delaying or slowing down imple-
mentation of portions of the law. On a number of occasions he has taken
care to point out both that the republic specifically forbids discrimination
based upon language and that Russian will remain for most people in the
republic what he calls in his 1993 statement “a channel of introduction” for
the flow of information into the republic. On at least one occasion, shortly
after independence, Nazarbayev even went so far as to suggest that there was
no need for Russian-speaking adults to learn Kazakh, a stance from which
he quickly retreated.
But while President Nazarbayev has taken pains to reassure the local
Russian population on the matter, he has done little to slow the trend toward
Kazakh linguistic domination. While Nazarbayev promises that the intro-
duction of Kazakh will take at least a generation to be completed and must
be done through the education system rather than by excluding people
from public life, the present leaders seem committed to making Kazakh the
republic’s only public language. In 1993 Nazarbayev called the Kazakh lan-
guage “an additional factor of the consolidation of all citizens of Kazakhstan”
and the 1996 official statement called it “a consolidating medium of com-
Martha Brill Olcott | 181

munication for the free development of the languages of the representa-
tives of nationalities living in Kazakhstan.” Such statements offer little
encouragement to most of the country’s non-Kazakh populations, who are
unable to function effectively in the Kazakh language in work situations.
Many Kazakhs cannot either.
The scale of difficulty inherent in making Kazakh the language of the
work environment was illustrated by a December 1996 parliamentary study
that found that only 9.5 percent of the respondents worked in exclusively
Kazakh-language environments, while 39 percent worked in exclusively
Russian-language environments, and another 19.7 percent worked in envi-
ronments that were predominantly Russian-language, with some translation
into Kazakh. Although the proportion of Kazakh and mixed-language envi-
ronments is increasing steadily, they are still more characteristic of cultural
milieus and rural settings than they are of urban and especially modern
economic ones.
The use of scarce resources to enlarge the Kazakh-language work envi-
ronment at a time when the republic has so many other pressing needs
seems of questionable wisdom and remains a contentious issue. The
Kazakhs themselves spar over whether their language can be made to serve
as a modern technical language, at least without the adoption of consider-
able numbers of non-Kazakh words and phrases, since Soviet-era discrim-
ination against Kazakh kept the language essentially a “kitchen tongue,” in
which there are still, as Kazakh political scientist Nurbulat Masanov put it,
“dozens of words to describe a camel . . . [but] no words for modern tech-
nology or science.”37
Yet languages can be adaptive if state resources are invested to that end,
and Kazakh nationalists are quick to suggest how this can be done. In Sep-
tember 1998, the leaders of the Azat civic movement made a series of pro-
posals on expanding the sphere of the Kazakh language, including forcing
commercial, private, and foreign organizations to emphasize it, and the
introduction of a special tax on non-Kazakh speakers to pay for the cost of
Russian-Kazakh interpreters employed by the government. They also
demanded that prospective applicants who did not speak Kazakh should be
granted employment only on condition that they will learn the language.
Starting in 1999, Azat wants college entrance and high school exit exams to
be conducted in Kazakh only.38 Such suggestions, although insupportable
in Kazakhstan’s current political climate, still leave non-Kazakhs feeling
much alienated from their new state.39 Adding to this is that they are being
182 | A Divided Society

cut off from the Russian media. Kazakh officials lament that an enthusias-
tic audience for Kazakh-language media has still not been created, yet by
1998 Russian-language radio broadcasting accounted for less than 10 per-
cent of the total, a topic that then Prime Minister Vladimir Putin took up
during his September 1999 official visit, with little evidence of success.40
The Russians in particular look to their ethnic origin as the explanation
of why things go wrong, and when surveyed, non-Kazakhs are more likely
than Kazakhs to claim that ethnic relations have worsened.41 The Russians
believe that they have been subjected to more than their fair share of down-
sizing in the government and even in private enterprise, where there are no
formal legislative restrictions on Russian language usage. More than half
the young Russian university students surveyed in Astana and Almaty said
that ethnic origin would determine their career chances, whereas only a
quarter of the young Kazakhs gave a similar answer.42 The atmosphere of
suspicion is growing so great that Kazakhstan’s Russians sometimes claim
that the government is finding secret ways to aid the Kazakhs; for example,
when pensions were not paid for three months in North Kazakhstan oblast,
rumors circulated that the Kazakhs were on special rosters and were receiv-
ing their pensions at local mosques.
The local Russian population does not trust the Kazakh-dominated gov-
ernment. According to a 1997 poll, only 14 percent of the Russian respon-
dents trusted Kazakhstan’s local authorities and 13.6 percent trusted the
country’s republican ones. For the Kazakhs, these numbers are significantly
higher: 23.5 and 35.3 percent, respectively, said that they trusted the gov-
ernment, which was also far from resounding support.43 The Kazakhs were
also more likely to endorse the government’s treatment of minorities and
cultural policies. In a 1999 poll funded by the U.S. Department of State,
51 percent of the Kazakhs thought that their government was doing a good
job in protecting minorities, while only 31 percent of the Russians agreed;
67 percent of the Kazakhs and 50 percent of the Russians thought that the
government was doing a good job in maintaining national unity; 74 percent
of the Russians believed that the government was doing a good job devel-
oping Kazakh language and culture, as did 67 percent of the Kazakhs, which
speaks to how large a constituency exists for a Kazakh nationalist lobby. The
rifts within the Kazakh community on these questions, however, are also
clear. A minority of the Kazakhs did not feel that the government was pro-
viding enough support for the Russian language; 72 percent of the Kazakhs
believed the government was doing a good job of developing Russian lan-
Martha Brill Olcott | 183

guage and culture, and only 38 percent of the Russians shared that belief.
For all the complaints about discrimination, however, only 23 percent of the
Russians surveyed (and 9 percent of the Kazakhs) believed that they had been
discriminated against in the past three years because of their ethnicity.44
One thing that seems to frustrate Kazakhstan’s Russians is that there is no
one to champion their cause. The freedom of action afforded most NGOs in
Kazakhstan is steadily diminishing, particularly those that are genuinely
independent of ties to the government. Most Russian nationalist politicians
have left the country; some have accepted government sinecures and oth-
ers have been frightened into inactivity. Equally important is the sharp
diminution of Russia’s interest in “offshore” ethnic Russians. While support
for the “25 million Russians of the near abroad” was something that played
well in the Russia of the early 1990s, the issue has slowly faded with time
when it became clear how difficult Russia’s own transition would be.
There is still a core elite group in Russia, including politicians, national-
ists, and human rights activists, that remains concerned with the fate of
Kazakhstan’s Russians. They continue to hold out hope that Russian Presi-
dent Putin may embrace their cause. Putin appears to have other priorities,
and most ordinary Russians are too preoccupied with their own lives and
problems in their own country to worry much about ethnic kin who live
beyond their borders.
Thus, absent a strong foreign sponsor, the Russians of Kazakhstan are
growing more stoic in the face of their steadily eroding political and eco-
nomic status. Partly this is because the most discontent have been able, and
sometimes even forced, to leave the country, leaving the Russian population
older, poorer, and without strong political leadership. With time, the coun-
try’s remaining Russian population seems to be reluctantly accepting its sec-
ond-class status and the inevitability of the state’s transition from multi- to
mono-ethnicity.

Intra-Ethnic Relations

The increasingly more mononational nature of Kazakhstan is creating intra-
ethnic tensions. Many in Kazakhstan, regardless of nationality, are becom-
ing more nervous about the rise of another type of ethnic problem, clanism,
which they see as exaggerated by the country’s economic problems and the
current level of corruption. While the role of clans in Kazakhstan can be
184 | A Divided Society

overstated, 45 clans (or a subethnic identity) have become an ever more
important source of patronage in Kazakhstan, since a person’s clan identity
has gone from something people sought to conceal to a source of public
pride.
This is partly the result of a deliberate campaign by the government to
reinvigorate clan identity as a building block of Kazakh statehood. About 35
percent of Kazakhstan’s population belong to the Great Horde, 40 percent
to the Middle Horde, and 25 percent to the Small Horde. These Hordes, or
zhuzes, are further divided into taip and ru (tribe and clan), although the dis-
tinction sometimes proves to be a vague one.46 The Kazakh clan system is
patrilineally based, and not every Kazakh knows his or her clan identity. A
Kazakh proverb states: “He is a fool who has forgotten what became of his
ancestry seven generations before him and who does not care what will
become of his progeny seven generations after him.”47 Yet many are unable
to name their seven fathers (going back seven generations) as Kazakh tra-
dition holds they should. Collectivization and the purges of the 1930s dealt
a critical blow to the Kazakh patrilineal system; a state-induced famine and
the arrests that followed left many Kazakhs with no family to continue their
ancestry, while others were often deliberately left in ignorance of their fam-
ily ties for their own protection by concerned family members who assumed
the responsibility of raising them after the arrest of their parents.
The traditional function of clans, to regulate the pastoral nomadic econ-
omy of the Kazakh community, was long ago lost. After a period of steady
decline during Russian colonial rule, it was effectively dealt a death knell by
collectivization. In rural Kazakhstan, especially where local communities
live on or near their traditional pastoral lands in ethnically consolidated
enclaves, clans had a continuing regulative social function, especially when
collective farms were successfully organized along clan lines. Although the
latter was more the exception than the rule, since Soviet economic policy
was designed to prevent the overlap of clan and collective farm membership,
clans continued to play an important role, especially in the agricultural
communities of southeast Kazakhstan, such as the one in which Nursultan
Nazarbayev was raised. Even in northern and western Kazakhstan, where
the population had been forced to move a great deal and clan identity is usu-
ally more attenuated, extended-family networks were commonplace and
offered their members protection and access to scarce goods and services.
In these parts of Kazakhstan the family structure at its base may have been
smaller, dozens of people rather than hundreds, but in the case of those fam-
Martha Brill Olcott | 185

ilies with access to the privileges of the Soviet economic and political sys-
tem, the family structures were no less powerful.
The career of Nazarbayev was given a boost by his marrying into a polit-
ically prominent Middle Horde family. His future wife, Sara Alpysovna, was
a cafeteria worker at Karmet, the giant metallurgical plant in Karaganda
where the future Kazakh president began his career. The job (and it is not
clear whether the future first lady actually spent any time waiting on cus-
tomers or simply had this job registered in her passport as proof of employ-
ment) was a plum. It meant ready access to meat and other foodstuffs,
which would provide for a family’s needs and could be sold at a handsome
profit to friends and family. Sara Alpysovna undoubtedly got the job because
her uncle, Syzdyk Abishev, was in charge of the local meat and dairy trad-
ing association. While Nazarbayev would eventually rise well beyond the
status of his wife’s uncle, the career of the two remained fully intertwined
until Abishev’s death in 1997.48
These networks took on increasing importance after independence.
According to a 1995 poll, 39 percent of the respondents believed that
belonging to a particular zhuz was important in getting a job or a promo-
tion.49 Clan politics plays the greatest role in southern Kazakhstan, which
is the territory of the Great Horde. This part of the Kazakh nation was ter-
ritorially the least displaced by Russian and Soviet economic policy, and the
extended family structure of the people is usually the most intact. The Great
Horde was organized around a dozen subethnic units, making it less hier-
archical than the Small and Middle Hordes, which had well-developed sys-
tems of nobility (known as the white bone) dating back to Mongol times.
There is also a certain amount of rivalry between the clans, which in the first
half of the nineteenth century regularly turned violent.
These tensions were transformed during Russian colonial and then Soviet
rule. The nobles of the Small and Middle Hordes better accommodated
themselves to Russian rule than did those of the Great Horde, and the sons
of many of the noble families from both the Small and Middle Hordes were
often educated in leading Russian schools and participated in the political
life of the empire’s two capital cities. The Kazakh contribution must have
seemed marginal to the Russians, but from the vantage point of the Kazakhs
it was significant. It led to a nascent nationalist movement, the Alash Orda,
which seized power during the chaotic years of the Russian Revolution and
was defeated by the Bolsheviks during the Civil War. Most educated
Kazakhs (at least those from the Small and Middle Hordes) supported the
186 | A Divided Society

Alash Orda to some extent, and because of this loyalty nearly all the north-
ern elite was questioned during the years of the Great Terror, regardless of
how active in the Communist Party or the Soviet government some of these
people were in the intervening years.
Conversely, largely untainted by the support of the nationalist cause dur-
ing the revolutionary period, the leading families of the Great Horde did not
suffer as badly as those from the north did, and the Kazakh Communist
Party that was built in 1938 after the purges depended heavily on the polit-
ical elite that had been nurtured in the southern part of the country. Over
the next fifty years many families from the Small and Middle Hordes rose to
positions of prominence in all sectors of Kazakhstan’s economy, with Small
Horde families predominating in the oil sector and Middle Horde families
in metallurgy. For all this time, however, the leadership of the Communist
Party of Kazakhstan was always in the hands of the Great Horde, which was
obviously under Moscow’s tutelage.50 Yet the Russians always had an incom-
plete understanding of how the Kazakhs had divided power between them-
selves. Especially during the long Brezhnev years, Moscow was content to
remain in ignorance, as long as the Kazakhs were able to produce a paper
trail to demonstrate that the Central Committee’s directives were being ful-
filled, and if they provided the necessary payoffs to their superiors.
Moscow tolerated the perpetuation of patronage networks that were
based in part on clans as long as the division of power between the clans was
done quietly. Although inter-zhuz rivalries were subdued in the Soviet
period, they have gained a new vigor since independence. Given their dom-
inance in the Communist Party, the politicians from the Great Horde were
for the most part more supportive of independence than those from the
other two hordes. They realized that it would fall to them to apportion the
property of the new state. They also worked fairly aggressively to build
alliances with politicians from the Small Horde, especially those who came
from regions with oil and gas, in their efforts to gain effective control of those
assets. The politicians from the Middle Horde, whose members have lived
much longer among Russians and who often worked in Russian-dominated
sectors of the economy, were relatively more interested in cooperation with
Russia.
Still, it is easy to offer an oversimplified view of clans as strongly deter-
ministic of success in today’s Kazakhstan. President Nazarbayev is from the
Shaprashty clan of the Great Horde, and the former prime minister, Nurlan
Balgimbayev, is from the Small Horde. Both men were able to work com-
Martha Brill Olcott | 187

fortably together for several years, and each has appointed or shown favor
to people who are close and distant kin, as well as to people from their home
regions. For the past several years the president has also managed to exclude
Akezhan Kazhegeldin, who is of the Middle Horde, from playing an active
political role in the country. He sparred with Olzhas Suleimenov, also of the
Middle Horde. If Kazhegeldin were ever to be victorious, many people from
the Middle Horde and northern Kazakhstan would push out some of those
now holding powerful posts who come from the south and west of the
country.
Yet it would be a mistake to conclude that clan drives any of the coun-
try’s major political rivalries. For many reasons Nazarbayev would not con-
sider Kazhegeldin svoi chelovek (“his man”), as those from the Soviet-era
used to put it. Far more important than clan differences was that
Kazhegeldin belonged to a different set of Soviet-era patron-client networks
than did Nazarbayev; that he had powerful connections in Russia at a time
when Nazarbayev felt ready to distance himself from Moscow; and that he
was siphoning resources that might have gone to the president and those
close to him.
Politics in Kazakhstan has always involved coalition building, and suc-
cessful political unions are frequently made across clan lines. As already
noted, Nazarbayev’s wife comes from the Middle Horde, and their marriage
has been a source of important alliances with people from the north. Fam-
ily is as important as clan, but in the end, most important of all is to be part
of a well-established patron-client network. Non-Kazakhs, people of mixed
ancestry, Kazakhs who do not know their family history, and those from the
“wrong” horde can all work their way into successful patron-client rela-
tions. These networks depend heavily on the loyalty of their members,
who repay that loyalty with protection of various sorts. The issue of loyalty
is closely intertwined with the role of family, for there are strong cultural
norms among the Kazakhs that set up obligations to help one’s relatives.
When Amalbek Tshanov became akim of Zhambyl oblast in 1995, for
example, he replaced 140 bureaucrats with people predominantly from
his clan.51
The presence of these patron-client networks helps to sustain a pattern
of official corruption and to put all who lack good connections at a consid-
erable disadvantage.52 This in turn fuels criticism of the power of clans in
public life and increases the number of people who feel disadvantaged by
their own ethnic or family circumstances. While much has been written
188 | A Divided Society

about the rise in clan and horde rivalries,53 even more dangerous is the
countervailing tendency of a consolidation of power by Kazakhstan’s first
family.
It is natural in a nomadic society to want to profit from the riches of one’s
ancestral lands, and prominent Middle Horde families are used to drawing
benefits from the various ores in their lands, just as those in the Small
Horde have benefited from the oil industry. The first years of indepen-
dence were good to some of these families, allowing them to accumulate
considerable fortunes, some of which have gone offshore. In the past few
years, however, President Nazarbayev and his various relatives have been
working hard to ensure that the family group will be by far the most pow-
erful of all families, holding controlling interests in every major sector of
the country’s economy. In addition to his daughters and sons-in-law, who
control most of Kazakhstan’s media, dominate Kazakhstan’s security forces,
are involved in the trade of alcohol, tobacco, and sugar, and have a grow-
ing role in the oil industry and the various mining and metallurgy sectors,
Nazarbayev has made good use of his wife’s relatives as well as his more dis-
tant kin. Some of these people, like Akhmetzhan Yesimov and Nurtai
Abykayev, have held a series of key posts in the government and the pres-
idential administration. 54 The president’s brother-in-law, Saginbek
Tursunov, served briefly as the head of the presidential administration.
More important, his wife’s relative, Syzdyk Abishev, Kazakhstan’s first min-
ister of foreign economic relations, is said to have played a key role in
establishing the family’s first foreign-held assets.55 More recently, Kairat
Saltybaldy Nazarbayev, the son of the president’s younger brother, has come
into official prominence. Saltybaldy (he has now legally dropped the name
Nazarbayev), who was born in 1970, spent several years working as the
deputy head of Astana and then worked as the first vice-president of
Kazakhoil. Before that he spent several years working for the National
Security Committee (KNB), as the deputy head of the division for the fight
against corruption among high-ranking officials. Presumably he had the job
of protecting Nazarbayev family interests.
The importance of clan and family ties certainly contributes to the prob-
lem of corruption in Kazakhstan, but while family connections may help to
grease a person’s way, those without blood ties can buy their way into offi-
cial favor. Many people rumored to be in business with the Nazarbayev
family, such as the Eurasia Bank Group or the Leviev group, are not relatives
and often are not even ethnic Kazakhs.
Martha Brill Olcott | 189

Although the government has begun to set up a national agency to fight
organized crime and corruption,56 the problems inherent in Kazakhstan’s
campaign against corruption were underscored by Nazarbayev’s son-in-law
Rakhat Aliyev’s being named to lead this effort as deputy head of Kazakh
national security, a post that he held until November 2001. In a nationally
televised interview on his wife’s Khabar television, Rakhat Aliyev called cor-
ruption in law enforcement bodies the most dangerous evil facing the coun-
try.57 Yet the first family has fought corruption by shifting blame from itself
and the central government to the officials serving in the country’s oblasts
and regions.

Regional Differentiation

Discussions of clan and ethnic differentiation mask another sort of differ-
entiation, the division of the country into more distinct regions. This dif-
ferentiation is occurring despite aggressive state efforts to eliminate
regional loyalties through the creation of a unitary state, by the presiden-
tial appointment of local governors, and by emphasis on an ideology of
national consolidation.
Despite these policies, regional differences remain profound and are
growing even more dramatic as the country’s economic transition moves for-
ward. Despite the changes in the budgeting processes designed to rational-
ize the tax base of oblasts and regions, local governments often lack the
competence and financial resources to handle many of the tasks with which
they have been saddled. Nor does the national government have the money
to develop a new transportation and communication system to bind the
country together in a reasonable time span. Several billion dollars for pub-
lic works could have been put toward these goals but were diverted to
building the new capital city of Astana. In addition, each of Kazakhstan’s
beleaguered oblasts was expected to build a high-rise building in the new
capital.
Regional identities still dominate national ones in the northern and
eastern parts of the country, especially among ethnic Russians. In a 1997
poll only 68.3 percent of Russians considered themselves citizens of
Kazakhstan, including every fourth person living in North Kazakhstan
and East Kazakhstan oblasts. In 1997 most people from Kazakhstan were
still traveling with their old USSR passports. As the passports expired
190 | A Divided Society

they had to be exchanged for new Kazakh ones, making the question of
citizenship more than just one of psychological predisposition. Ethnicity
remains highly politicized in northern Kazakhstan, and surveys have
shown those living in these two regions have been found to place the
most emphasis on the nationalities of prospective sons-in-law, neighbors,
and co-workers.58
At the same time, the growing mobility of Kazakhstan’s population is
making it more difficult for regional identities to harden and is also chang-
ing the demography of the country’s urban population. There is a constant
inflow of rural Kazakhs into the country’s cities, and some estimate that more
than two million people moved into urban areas during the 1990s. Yet
because many of these Kazakhs did not meet the criteria for legal registration
(a job and a fixed place of residence), the magnitude of this population wave
is not reflected in the recent census.59 This migration is largely contributing
to the growing decay of Kazakhstan’s cities, where the number of applicants
for jobs far outstrips the number of new jobs—in the most extreme cases by
as much as seventy to one. Most people therefore content themselves to
work off the books, drawing communal services from strapped municipali-
ties while contributing no taxes. Most also live in overcrowded substandard
housing, for despite the constant influx of new people to cities that were
already suffering from a deteriorating housing stock, Kazakhstan has
recorded an increase in new housing starts of only 8.6 percent for 2000, again
attesting to the troubled nature of the economies of most cities.60
A few cities, however, are changing for the better. Most prominent of
these is Almaty, largely because of the amount of foreign investment that city
has received and the substantial foreign community that such investment
has attracted. The new capital of Astana is also serving as a magnet and
should quickly develop a Kazakh majority since a disproportionate share of
the government officials, bureaucrats, and clerical staff who are coming to
the city are from the Kazakh population.61 The boom in Kazakhstan’s oil
industry has brought the creation of new urban centers in western
Kazakhstan, and more than a third of all urban growth has occurred in
Atyrau and Mangistau oblasts, where Kazakhs are moving.62 The residence
patterns within northern Kazakhstan have been changing as well, as whole
industrial cities shut down in the wake of the collapse of their enterprises.
Things got so bad in Saran, where there had been a large industrial rubber
plant, that people were offering to sell their apartments for 1,000 tenge and
even to trade them for a bottle of vodka.63 People have also been fleeing
Martha Brill Olcott | 191

Soviet-era environmental despoliation, particularly in East Kazakhstan.64
This has led to a shortage of qualified workers in East Kazakhstan, West
Kazakhstan, North Kazakhstan, Karaganda, and Kostanai oblasts. If the pace
of investment were ever to pick up dramatically, this shortage could create
severe problems for the country.65
The rumor of jobs is enough to get people to go from failing farms in the
countryside to their relatives’ couches in the cities. In Almaty, where signs
of economic recovery are visible in the new buildings and well-stocked
stores that are cropping up throughout the city, the constant wave of
migrants keeps unemployment relatively high. In 1997, before the impact
of the Russian financial crisis, unemployment was reported to have been
about 7 percent. Unemployment statistics, however, tell only part of the
story. While unemployment decreased by roughly the same amount, by
7–8 percent, in both Karaganda and South Kazakhstan oblasts, the nature
of the economic revival in the two cities was quite different. In a 1990
nationwide survey, 50 percent of the respondents in Shymkent said that they
had opportunities to make additional income. Almost 80 percent of those
living in Karaganda did not have such an opportunity. In the latter region
the drop in unemployment was fueled as much by the outmigration of
those seeking jobs as it was by the improved performance of the giant
Karmet steelworks.66 About 30 percent of the population in Shymkent and
Almaty said that they thought that the quality of life has improved since
1991, while only 20 percent of residents of Karaganda think so. In 1997 the
per capita GDP in Karaganda oblast was $1,711, just above the national
average of $1,451, while in South Kazakhstan (where Shymkent is found)
it was only $711. Those in Shymkent were on the whole more optimistic
about their future, 50 percent of the respondents believing that they could
rely on the government and official organs for help, compared with 14 per-
cent in Karaganda.67
There are substantial differences in standards of living across the coun-
try, and in 1997 the per capita GDP varied from a low of $488 in East
Kazakhstan oblast to a high of $4,654 in Almaty city. The economic situa-
tion in Almaty is in sharp contrast with that of the rest of the country since
its GDP is nearly twice that of the next most prosperous oblast, Atyrau
($2,925); Kostanai and Kyzylorda oblasts and Astana city, which has the
same legal status as an oblast (still officially referred to as Akmola oblast),
all cluster around this same range. On the other end of the scale, six oblasts
have a per capita GDP of under $1,000 a year.68
192 | A Divided Society

Not surprisingly, there is also enormous variation in the tax base of the
various oblasts, although each is faced with the same set of tasks and each
has the same sources of income. The oblasts, which are further divided into
regions and cities of oblast significance, must pay for preprimary, primary,
secondary, and specialized secondary (including vocational-technical) edu-
cation, provide guaranteed health care assistance, and pay unemployment
and other work-related benefits, as well as the cost of local law enforce-
ment.69 The uniform budget system adopted in 1999 provides local gov-
ernments with the proceeds of half the corporate taxes collected, plus all the
personal income tax, property tax, and local land tax. Oblasts are also
responsible for collecting the value added tax (VAT),70 which goes to the
national government, although they can keep part of the excise tax on alco-
hol. This replaces the previous system in which the oblasts ran up consid-
erable arrears, which were then partially covered by financial transfers from
the national government.
Obviously, those parts of the country that have been most successful at
attracting foreign investment have considerably more income than those that
have not. The figures from the revised budget of 1999 tell us that Atyrau
oblast (the site of the Tengiz project) collects 441 percent more corporate
income tax per capita than the national average; Mangistau oblast, 230 per-
cent; and Almaty city, 378 percent. Kostanai oblast in contrast collects 8 per-
cent less than the national average; North Kazakhstan oblast, 12 percent
less; and Almaty oblast, 13.8 percent less. There are similar disparities in the
personal income tax collected on a per capita basis as well. The Atyrau and
Mangistau oblasts and Almaty city all do considerably better than the national
average (by 299, 276, and 317 percent, respectively), while the Akmola,
Almaty, North Kazakhstan, and South Kazakhstan oblasts all do considerably
worse (34.9, 27.5, 41.8, and 32.0 percent, respectively).71
That there are far more “loser” oblasts, where there is substantially less
income generated on the part of the population than is the national average,
probably helps to explain the low expectation level of government perfor-
mance. Overall, the Kazakh residents do not have much confidence that
they can expect help from the local governments. If a 1996 survey by
Kazakhstan’s Institute of Strategic Studies is at all representative of public
opinion, then 48 percent of those who live in Kazakhstan think that the fail-
ings of local government are the result of corrupt administrators, while 44
percent blame incompetent administrators.72 This adds up to most Kazakh
residents having no confidence in local government.
Martha Brill Olcott | 193

The focus of the national anticorruption campaign has increased the
public perception that those who live in Kazakhstan cannot trust their local
officials. Over the past few years, for example, twenty-one members of the
law enforcement bodies of South Kazakhstan have been prosecuted, and the
local prosecutor’s office has been charged with poor supervision because
only 1,497 cases were tried in courts out of 4,244 criminal cases referred.73
Law enforcement officers were implicated in several nasty corruption cases
in Pavlodar, and in 1999 six officers were convicted of extortion and two of
bribery. Four top law enforcement officials in the Mangistau and Zhambyl
regions and two judges in Ust-Kamenogorsk were also fired in connection
with corruption cases.74
Local officials are likely to remain the target of the anticorruption cam-
paign since this helps to keep the public’s attention away from the malfea-
sance being committed by Kazakhstan’s leading officials or members of their
families. In fact, in the past two years there has been a rather theatrical
quality to the president’s anticorruption campaign, given the leading role
that Aliyev was assigned to play in it. In April 2000, the Special Commis-
sion for the Fight against Corruption was dissolved by presidential decree,
and its powers were delegated to the president’s administration. At the same
time the heads of administration of the country’s regions and the cities of
Astana and Almaty were made personally responsible for law and order in
their respective regions and cities, which made them even more directly
accountable to the president.
Corruption is certainly pervasive at every level of society in Kazakhstan,
but at least some oblast officials have been striving to meet their responsi-
bilities. There have not been wide fluctuations in the expenditures of
Kazakhstan’s oblasts on both education and health care, which means that
officials in the poorer oblasts are making an enormous effort to provide ser-
vices to their constituents. The uniform budgetary system adopted in 1999
seems to have been met with displeasure in rich and poor oblasts alike. It
certainly increased the power of the national government at the expense of
the local authorities since it placed oblast income and expenditure levels in
the hands of the central authorities.75
The current system has left the wealthier oblasts very frustrated.76 Those
living in resource-rich oblasts, especially those in western Kazakhstan,
would like greater financial autonomy from the center and believe that the
local elites would be better able to ensure that resource development works
to the benefit of the region rather than entrust the task to the national elite.
194 | A Divided Society

There is also an important sector-specific elite especially coming from the
oil and gas industry (which is disproportionately from the Small Horde),
and this makes some of Kazakhstan’s major political cleavages cross-cutting
ones. These elites may press Astana and may even manage to gain conces-
sions from the oil and gas companies working in their oblasts, but there are
few formal instruments available to the oblasts to use in pressing their case.
The Kazakhstan constitution (both the constitution of 1993 and the one of
1995) provides the oblasts with only statutory rights and gives the central
powers the right to abolish oblasts and to name their heads.
The move of the capital to Astana in the center of the country has
improved the government’s reach and made the day-to-day supervision of
the northern and western oblasts of the country much easier. The Kazakh
government would eventually like to create more uniform and governable
oblasts with the consolidation of sparsely populated oblasts. The process of
doing this would create lucrative new sources of patronage as well as elim-
inate older ones over which the president’s control has been incomplete.
Consolidation has eliminated what were some of the least populous
oblasts (such as Turgay, which had only 315,000 people in 1992). Yet there
are still marked differences in size. South Kazakhstan oblast, the most pop-
ulous, contains nearly two million people, or nearly 12 percent of the
nation’s population, while Mangistau, now the least populous oblast, con-
tains only 436,000, or just 2 percent of Kazakhstan’s population. Seven of
the oblasts now contain more than one million people, while two of them
still hold less than a half million each (Atyrau and Mangistau).
The character of the oblasts is much different as well. Several of the
oblasts are dominated either by single cities or by urban clusters, mean-
ing that the bulk of the population in those regions is urban. Almaty city
is, of course, 100 percent urban, but other predominantly urban oblasts
include Karaganda (84.8 percent before Zhezkazgan, 79.1 percent, was
joined to it), Mangistau (79.6 percent), and Pavlodar (61.2 percent). In
contrast, South Kazakhstan oblast has only a single city (Shymkent, pop-
ulation about 400,000 in 1992, when it was the republic’s third largest
city), meaning that 61.1 percent of the population is rural or village-
based. Almaty oblast (distinct from Almaty city) is the most rural of
Kazakhstan’s oblasts, at just 22.2 percent urban. In general, 55 percent of
Kazakhstan’s population lived in urban areas and 44 percent in rural
areas.77 The per capita income in rural areas is estimated to be 60 percent
lower than it is in urban areas, with a far greater percentage of the popu-
Martha Brill Olcott | 195

lation confined to the bottom one-fifth of average income than is true of
the urban population.78
The ethnic balance in these oblasts also varies widely; Atyrau and Kyzy-
lorda oblasts are each about 90 percent Kazakh, while Karaganda, Kostanai,
and North Kazakhstan oblasts remain mostly Russian, despite recent admin-
istrative moves to reduce the Slavic majority. The old Soviet transport sys-
tem reinforces these ethnic divides. There are no major highways directly
connecting the various cities of the republic; the three major roads in the
republic (M–32, M–36, and M–38) all tend northwest-to-southeast, while
the most convenient true east-west highway (M–51) lies almost entirely
within Russia. Tellingly, in an April 1997 interview, presidential spokesman
Yermukhamet Yertysbayev listed the need to build a highway connecting
Almaty, Karaganda, Akmola (now Astana), and Borovoe (in Kokchetau
oblast) as second in national priority only to the need to construct a pipeline
to transport oil from the Caspian Basin.79 Upgrading the road and rail sys-
tem will be a slow and costly proposition. The first major rail project begun
by the Kazakh government, a 184-kilometer stretch from Aksu (near
Kokchetau) to Konechnaya (outside Semipalatinsk) was begun in May 1998
and was planned as a two-year project costing about $20 million. The chal-
lenges of working in this terrain stalled the project, but it was completed in
June 2001.80 With this new stretch of road finished, the Kazakhs are able to
ship freight across the country between China and Europe without going
through Russia.
The present arrangement of the national infrastructure leaves Kazakhstan
susceptible to economic pressure from Russia and reinforces the disposition
of many citizens in the northern industrial cities to understand themselves
as arbitrarily attached to Kazakhstan. These overwhelmingly ethnic Russian
cities are closer to Russia than they are to Almaty or even to Astana.81 The
difficulties of linking Almaty to these cities is certainly one of the reasons
President Nazarbayev moved the capital to Astana, but when Astana was
first inaugurated, it was a twenty-two-hour rail journey between the two
capitals, and there were only a few daily flights between them. The latter has
changed, and rail service has been improved, but a major infrastructural
overhaul is still decades away.
East Kazakhstan oblast and its capital, Ust-Kamenogorsk, are typical of
the northern, largely Russian regions that present challenges for the gov-
ernment. The predominantly Russian cities of Kazakhstan’s north are littered
with the industrial relics of the Soviet past. Built to exploit deposits of
196 | A Divided Society

beryllium, uranium, and other defense-related minerals, Ust-Kamenogorsk
has been particularly hard hit by the economic changes of the past decade.
The Ulba metallurgical plant, which was the city’s largest employer, was
forced to shut down a number of its operations, while other important eco-
nomic functions of the oblast, such as mining, are under continual threat
because of chronic wage and pension arrears.82
Industrial workers in the southern part of the country are no better off
than their colleagues in the north. In late November 1996 there were mass
demonstrations and disturbances in Shymkent, occasioned by Uzbekistan’s
failure to deliver electricity and natural gas as had been agreed; these dis-
turbances were nearly identical to ones in Ust-Kamenogorsk and other
northern cities that took place at about the same time because Russia had
also stopped shipping energy to Kazakhstan.
Kazakhstan’s poorest regions are in the south of the country, where more
than half (55.5 percent) of the population lives below the established sub-
sistence minimum.83 Deteriorating economic conditions have caused real
unhappiness for all the population and have left local ethnic Russians, about
15 percent of the population in South Kazakhstan oblast, feeling totally
stranded because they lack typical Kazakh extended family networks to get
them through tough times. A series of surveys from 1993 to 1996 found that
80 percent of the Russians living in South Kazakhstan wanted to leave, but
only 10 percent expected to be able to.84 The situation is little better in
Zhambyl, where people are leaving such dying industrial cities as Kentau,
Zhanatas, Tekeli, and Karatau. The most extreme case is the city of Zhanatas,
which at one time had a population of more than fifty thousand people.
Once the capital of Kazakhstan’s phosphorus industry, this city is reported
to have virtually become a ghost town by 1994, the population reduced by
at least 30 percent, with more than three thousand abandoned apartments
and no municipal electric or gas supply.85 The factory continues to serve as
the main employer for the town and in 1997 was the site of a major strike.
Despite Kazakhstan’s serious industrial problems, the situation in the
countryside is often seen as more dire than in the cities. In one year alone,
1997, nearly a hundred thousand people moved to cities and towns, includ-
ing 14,000 who moved to Almaty.86 This was before the August 1998 cri-
sis! As a result, the long-term recovery of Kazakhstan’s southern oblasts
could be even more problematic than that of the industrial centers in the
north. Kazakh-dominated South Kazakhstan and Kyzylorda oblasts have
experienced higher than average rates of unemployment, and Kyzylorda
Martha Brill Olcott | 197

has one of the worst ecological situations in the country.87 Such cities as
Pavlodar or Aktiubinsk, while far from thriving, are beginning to show signs
of recovery since their basic industries (aluminum in Pavlodar, chrome in
Aktiubinsk) have attracted foreign investors.
Such disparities suggest that Kazakhstan is likely to develop significant
regional imbalances, with some areas becoming more affluent and others,
perhaps the majority, mired in continuing poverty. The same imbalance
should hold between urban areas and rural ones. These differences will
continue to have ethnic overtones because most of the moribund industry
will be predominantly Russian, while the new winners of economic recov-
ery seem certain to be well-connected Kazakhs.

The Growing Gap between Rich and Poor

Growing poverty is a national problem, and severely depressed economic
regions are found in every part of the country. Moreover, even where there
are particularly densely Kazakh regions, such as in southern or western
Kazakhstan, the national government is seen as to blame, given the unitary
nature of the Kazakh state.
Regardless of where they are located, ordinary citizens in Kazakhstan
feel ever more economically disadvantaged and powerless because of it.
Much of the fault for this, they feel, lies with the government in Kazakhstan.
According to a recent USIA-funded poll, 90 percent of those surveyed in
Kazakhstan thought government was doing a poor job in providing social
protection for unemployed, homeless, and needy; 71 percent believe that it
is doing a bad job in guaranteeing the timely payment of wages, salaries, and
pensions. Those surveyed felt that the old Soviet values were more equitable
and better served their interests than do the new market-oriented ones, and
68 percent of those surveyed said that the situation would be improved by
the renationalization of former state assets (68 percent) and by nationaliz-
ing private banks and companies (57 percent).

Employment

While it is clear that the economic situation in Kazakhstan is a major source
of popular discontent, it is difficult to gauge how badly off most people are.
Documenting unemployment is challenging since one encounters the twin
198 | A Divided Society

problems of hidden unemployment and hidden employment. The govern-
ment does not want to disclose how many people are unemployed. To record
a high figure of unemployment puts both international and national confi-
dence at risk. It also makes the government liable for the payment of social
welfare benefits. Similarly, most people will go to great lengths to avoid
recording their employment in order to avoid paying taxes on their earnings.
The figures for the employed and unemployed populations are hard to
reconcile. Official figures show unemployment growing from 0.4 percent in
1992 to a “high” of 4.1 percent in 1996 and then dropping to 3.9 percent
in 1997, 3.7 percent in 1998, and back up to 3.9 percent in 1999.88 Even
the Kazakh government does not consider these figures to be good indica-
tors. The Kazakh labor minister considered the actual unemployment fig-
ure for this period to be 13.5 percent.89 Informal estimates set the percentage
of unemployed much higher. A 1998 article in Novaia gazeta criticizing
Nazarbayev’s performance listed the unemployment rate as 20 percent.90
None of these statistics includes people on indefinite furloughs or those
who are employed and not being paid because neither group is eligible for
unemployment benefits. In mid-1996, about 80 percent of the industrial
work force in North Kazakhstan, Karaganda, Semipalatinsk, and Kostanai
were idle or not receiving salary, but official unemployment statistics for
these oblasts ranged from a low of 7.0 to a high of 9.6 percent.91
At the same time, Kazakh government statistics on the number of peo-
ple employed in the economy show a decline of 5.8 percent from 1995 to
1996 and of 20.2 percent from 1996 to 1997. Only a small percentage of
this can be explained by outmigration and the natural aging of the popula-
tion.92 In fact, throughout this period the size of the working age popula-
tion of the country continued to rise.93 Those just entering the work force
seem to be having the toughest time, the only exception being the gradu-
ates of new market-oriented training programs, still a privileged few. The
Kazakh government unemployment service reported in December 1998
that 35.4 percent of those registered with the public employment service
were between sixteen and twenty-nine years old.94
Being employed was no guarantee of security either. Government
employees were not always paid in a timely fashion. Workers at Kazakh Air
had not been paid for several months in 1998, when a scandal broke over
tens of thousands of dollars of free trips that had been given to government
officials.95 The decision was then made to restructure and privatize the air-
line. The government has frequently tried to divest itself of unprofitable
Martha Brill Olcott | 199

enterprises that cannot meet their payrolls, even if they lack feasible priva-
tization plans.
The government attempted such a divestiture at the phosphorus plant at
Zhanatas, outside Taras. Workers there responded with a series of protests
and strikes that crippled the city and surrounding areas in 1997 and early
1998. Two hundred workers began to strike in mid-December 1997, and by
January their numbers had swelled to 3,000. Fifty of them marched to
Almaty, demanding $5–$6 million in back wages from 1996 and 1997, but
the police prevented them from entering the city. This strike attracted neg-
ative press coverage throughout the CIS because the strikers included preg-
nant women and women with young children. Some of these staged hunger
strikes to bring attention to their plight. The hunger strikes resulted in two
deaths. Eventually, the government sent a detachment of approximately one
thousand police to break up the strikers when they successfully blocked the
railroad tracks and paralyzed the principal Moscow-Bishkek-Almaty train
route. Not only were the strike organizers arrested, they were also made
liable for the costs of the rail disruption.96
The government’s harsh response in Zhanatas prohibitively raised the
stakes for those interested in developing an independent trade union
movement in the country. Independent groups in the north of the coun-
try were already being coopted, but support for independent unions was
still growing in the south. In October 1997 some thousand workers from
the Achpolimetal plant at Kentau in South Kazakhstan (Shymkent) set
out to march to Almaty, protesting ten months of unpaid wages totaling
about $1.6 million. Authorities stopped the protesters before they had
gone very far, but the workers set up a tent camp and stayed there for
almost a month. Many launched hunger strikes, and disease spread
through the camp. The protests finally ended in early November when the
government paid the workers through August, but they continued to
demand the outstanding two months’ wages, as well as guarantees of
future payments.
Five union leaders were accused of organizing the march in Kentau, but
they denied the charges.97 For a while, in the mid-1990s, it looked as though
the Kentau workers would link up with the independent labor movement
in northern Kazakhstan,98 but the two independent unions at Kentau were
dissolved in 1998 because of their “illegal activities.” Through the judicious
use of arrest and intimidation, the government has succeeded in leaving the
leadership of this independent union movement in disarray.
200 | A Divided Society

Kazakhstan initially had a powerful independent labor movement, which
developed around the Karaganda coal miners’ strikes in 1989–1991 and
helped make Leonid Solomin, the head of the so-called Confederation of
Free Trade Unions, a national political figure. Following that, there were
periodic strikes in the north,99 and in early 1995 some hundred thousand
strikers protested in Karaganda.100 Less than two years later, however, in
October 1996, an effort to organize a nationwide day of protest largely fiz-
zled. From then on the strike movement was characterized by much smaller
actions, like the protest at Akmola oblast’s Stepanogorsk Uranium Produc-
ing Plant on July 15, 1997, to protest five months of unpaid wages, or the
demonstration by a thousand people in Kokchetau that protested the non-
payment of wages.101
The government concentrated less on satisfying workers’ demands than
on wooing the independent union leaders, pressuring them to support var-
ious government “national reconciliation” efforts. Prominent figures who
proved unyielding were jailed. Most notable was the case of Madel Ismailov,
of the independent Worker’s Movement, who was sentenced to a year in
prison for “insulting the honor and dignity of the president” at a November
7, 1997, rally. Even the seemingly coopted continued to be at risk. Leonid
Solomin’s wife, Valentina Sevryukova, for example, was named the deputy
minister of labor, a post she held until 1999. Yet Solomin did not stay silent
even in the face of his wife’s success, and in 1997 he was tried on charges
of illegal financial activity. Although Solomin was acquitted, the strong-arm
tactics of the Kazakh security service were revealed by the case, with abuses
including the intense intimidation of Solomin and other union leaders,
often running along anti-Semitic lines.102
Although severely weakened, Solomin’s organization still exists, but it is
difficult to gauge how much support it, or other independent trade unions,
still enjoys. In late 1999 the Confederation of Free Trade Unions claimed a
membership of 250,000, while the state-sponsored Federation of Trade
Unions claimed four million members. Informed observers, however, say
that both figures are unrealistically high.103 The independent union move-
ment is able to organize small strikes, providing they are held in accor-
dance with legal requirements, that required negotiations have failed, and
that fifteen days’ advance notice is provided, but everyone is well aware that
the government would react quickly to quell any strike that showed signs
of becoming a mass protest.
Martha Brill Olcott | 201

Employment is little protection against the risk of living in reduced cir-
cumstances. In fact, in early 1998 the government suspended its own min-
imum payment regulations until 2004 because it was paying base salaries of
only $40 per month, or two-thirds of what the guidelines called for.104
The plight of Kazakhstan’s farmers is even worse than that of the work-
ers. In addition to having to struggle with the rising cost of living, those who
previously lived on state farms are often also encumbered with personal debt
acquired when their farms were privatized into individual household
economies. In 1999 the per capita cash income was 2.2 times higher in the
cities than in the rural areas.105

Living Standards

What percentage of the population is poverty-stricken depends on the stan-
dard employed. A 1998 UNDP study reported that 90 percent of
Kazakhstan’s population lived on under $100 per month, but based on a
measure of the relative purchasing power of the local currency, only 30 per-
cent of the population was considered poverty-stricken.106 A UNDP report
published in 2000 found that 65 percent of the population lives below the
poverty line of $4 a day calculated in 1990 U.S. dollars at “purchasing
power parity.”107 This corresponds roughly to an earlier International Com-
mittee of the Red Cross claim that 70 percent of Kazakhs are living in
poverty.108 According to the UNDP’s Human Development Report 2000, the
poorest 20 percent receive 6.7 percent of the country’s income, while the
richest 20 percent receive 42.3 percent.
One measure of the declining standard of living in Kazakhstan is the
changes in diet, because while income has been rising, the prices of food
have been going up even faster. While in 1990 the Kazakhs ate 71 kilos of
meat, in 1995 they consumed only 43 kilos; per capita milk consumption
dropped from 307 kilos to 208 kilos, and the number of eggs consumed
dropped from 222 to 104 per person.109 At the same time, the percentage
of total expenditures that went for food increased from 38.6 percent in
1990 to 52.8 percent in 1997.110 In some parts of the country this is creat-
ing a social crisis. In a 1999 study done by the Kazakh Association of Soci-
ologists and Political Sciences, more than one-third of those interviewed said
that they were unable to feed their family satisfactorily; the situation was
reported to be most dire in western Kazakhstan, where 63.6 percent of
202 | A Divided Society

urban residents and 43.2 percent of rural residents cited their inability to
provide adequate food. The same study reported that 15.9 percent of all
rural respondents and 13.9 percent of all urban respondents were suffering
from famine.111

Health Care and Life Expectancy

The health care available to most Kazakhs is deteriorating as well. The state
remains committed to providing some limited public health care, yet ordi-
nary Kazakhs have less access to quality medical care than they did previ-
ously. The Soviet health care infrastructure that the nation inherited remains
poorly maintained, and funding for improvement remains difficult to find.
Although the government has made steps toward reform by introducing
pilot projects that offer experimental new provider payment methods, the
large-scale reform that is needed has not yet been undertaken.112
Like all other post-Soviet states, Kazakhstan now has to depend upon its
own resources to meet the health care needs of its citizens. Although each
of the republics had some specialist care, there was always the option of
being sent to specialized treatment facilities in Russia. That still exists, but
like all foreign medical care, it is exclusively fee-based. Much of the better
medical care in the country is also on a fee-for-service basis. Kazakhstan
introduced mandatory health insurance in 1996, which was designated as
a 90–10 percent government–private subscriber co-pay.113 Public expendi-
ture on health care has declined since 1990 from 3.2 percent to 2.1 percent
of the GDP, not taking into account the decline in the country’s GDP over
the same period.
As this shift from public to private medicine occurs, the country’s med-
ical establishment is contracting. Many rural and remote urban areas have
lost doctors and nurses and seen their hospitals and clinics shut down in an
effort to rationalize expenditure by closing marginal and ill-equipped facil-
ities. The total number of hospital beds is decreasing as well, including the
beds in maternity hospitals and pediatric wards. The number of beds
devoted to the latter two categories decreased by almost a third between
1995 and 1998.114 The number of doctors practicing in the republic has
continued to drop, declining by more than 10 percent between 1995 and
1998 (down to 53,200). At the same time, in 1998, the UNDP reported that
the doctor-patient ratio improved, suggesting that many in Kazakhstan are
simply not using the health care system, especially those in rural areas, who
Martha Brill Olcott | 203

now must make costly trips to more distant facilities. The UNDP, though,
did report that the government is keeping up with previous performance
records for most kinds of early childhood inoculations. The one exception
is measles, where the percentage of vaccinated children declined by a little
more than 20 percent from 1989 to 1994–1995.115
There is reason to call these official statistics into question since
Kazakhstan’s press has reported a marked rise in the incidence of several
infectious diseases in a successive number of localities.116 In the case of at
least one disease, the government admits to a major problem: the incidence
of tuberculosis is at epidemic proportions in parts of Kazakhstan, and mor-
tality from the disease has increased by 50 percent in the past three years
alone.117 The government also admits that venereal disease has reached epi-
demic proportions, costing the country $15 million in lost labor time in
1997.118 AIDS is a growing problem as well, and the health care system is
doing a poor job of managing the growing drug problem among
Kazakhstan’s youth. The number of teenagers registered at Kazakh drug
treatment centers rose fourfold from 1997 to 2000, and the bigger problem
is that most addicts do not seek treatment. In fact, one Kazakh social ser-
vice official estimated that about 40 percent of the country’s youth are drug
users.119
Official statistics show a two-year decline in life expectancy from 1980
to 1996, reporting a drop from sixty-seven to sixty-five years,120 as well as
an increased death rate for the same period, from eight to ten per thou-
sand.121 Some of this growth is explained by the overall aging of the coun-
try’s population, but nongovernmental sources claim that life expectancy in
Kazakhstan declined by four and a half years from 1990 to 1995.122 The
author of that report argued that environmental degradation was an impor-
tant source of the problem, which was only compounded by declining
health care in the country.123

Environmental Issues

The environment continues to be a cause of real concern, and some of
Kazakhstan’s poorest people live in the country’s areas of greatest environ-
mental despoliation. Environmental problems are contributing to the coun-
try’s declining birthrate.124 Kazakhstan’s population is expected to grow by
less than 1 percent a year until 2025. While independence has made more
international funding available to clean up the various environmental
204 | A Divided Society

problems that date from the Soviet era, these funds are sufficient to touch
only the surface of the problems. The list of environmental challenges is
seemingly endless, including the pollution of the Caspian Sea, as well as air
and water pollution caused by Soviet-era industrial operations.125 Oil leaks,
the excessive use of pesticides, and the improper disposal of industrial
chemicals all threaten the nation’s ecology. Obsolete cotton-harvesting
machinery led to the excessive use of chemical herbicides and pesticides,
which averaged 20–25 kilos per hectare throughout Central Asia, as com-
pared with the average for the former USSR as a whole of no more than 3
kilos.126 Pesticide contamination has led to a general shortage of drinking
water and a high rate of illness among women working in the fields.127
The Aral Sea crisis could be Kazakhstan’s gravest environmental problem.
Once the center of the world’s most fertile regions and the fourth largest lake
on earth, the Aral Sea has shrunk over the past 30 years to just a small part of
its former size. Soviet planners, who made Kazakhstan the USSR’s main pro-
ducer of cotton, diverted local rivers away from the Aral Sea, causing not only
a 16-meter drop in the level of the sea, but also a climate change when salt and
dust from exposed mud beds blow across the region.128 In addition, the pesti-
cides and fertilizers used to feed the cotton fields have found their way into
water and irrigation channels, poisoning the drinking water and food.129
Current and future generations will continue to suffer the aftereffects of
the Soviet nuclear and chemical weapon testing programs in Kazakhstan,
most particularly in and around Semipalatinsk. From the 1950s to 1990,
468 nuclear tests were carried out at the Semipalatinsk nuclear testing range,
including twenty-six above-ground tests. Because of the high levels of radi-
ation in the area that have resulted from nuclear testing, the number of
stillbirths in the Semipalatinsk region rose from 6.1 for every 1,000 of the
population in 1960 to 12.2 in 1988. In addition, the rates of neurological
and psychiatric disorders in the region grew rapidly, as did cases of mental
and physical retardation among children.130 The country’s tainted water,
especially around the Aral Sea, and the legacy of nuclear testing are partly
responsible for deteriorating maternal and child health. Between 1994 and
1997 alone, maternal mortality rates rose from 48.4 to 59.0 for every
100,000 deliveries.131 Infant mortality rates increased in Kazakhstan from
26.0 to 27.4 per thousand between 1989 and 1995 and then to 36 per
1,000 live births in 1997.132 According to a recent U.S. government–
supported poll, 74 percent of the population think that their government is
performing poorly in cleaning up environmental pollution.133
Martha Brill Olcott | 205

Education

Kazakhstan’s citizens continue to have expectations of government perfor-
mance that are not being met in other areas as well. In a U.S. government
study similar to the one on environment above, 83 percent of respondents
thought the government should be the main underwriter of the country’s
higher education.134 Higher education is being partially privatized as well,
although the state still provides free primary and secondary education.
There is reason, however, to call official education statistics into question.
Figures provided by the government to the UNDP admit a drop in the per-
centage of the preschool population attending school, from 54.7 percent in
1989 to 23.5 percent in 1995, but a drop of only 4 percent in the share of
the eligible population attending primary school to 90 percent in 1996.135
Unofficial sources report a much more serious problem and claim that up
to 20 percent of the school age population remains at home.136
This, combined with a reduction in the number of state-funded preschool
institutions, means that women of child-rearing age are more likely to be
forced to remain at home than they were during the Soviet period. Similarly,
if there is a choice to be made as to who will receive the necessary shoes and
warm clothing to attend school, girls are more likely to have to forgo edu-
cation than are their brothers. The current situation contributes to the fur-
ther erosion of the position of women in independent Kazakhstan. In 1996
women made up 43 percent of the work force in the sciences, 55 percent
in social management, 47 percent in industry, and 73 percent in culture.137
However, in 1998 women held a bit over 11 percent of the seats in the
Majilis, a percentage that remained almost unchanged in 2000 when women
held eight seats out of seventy-seven in the Majilis, or a little more than 11
percent. The growing suicide rate among women in Kazakhstan is another
indication of the hardship they face in a turbulent society.138
Reading between the lines of official statements gives more of a sense of the
crisis in the education system than the government likes to admit. The state
education committee asserts that it has taken pains to restore instruction in
nursery, kindergarten, and primary schools that had been shut down. In
1998, 162 primary and secondary schools, 17 preschools, 29 vocational and
technical schools, 20 night schools, and 4 boarding schools were reopened.
The press release giving these figures did not, however, release any informa-
tion on how many schools remained closed.139 Far more could be done. When
the Ministry of Internal Affairs sought to crack down on official shortfalls and
206 | A Divided Society

thefts from within the Kazakh government, the biggest culprit was found to
be the Ministry of Health, Education, and Social Welfare.140
Kazakhstan puts forward a misleading picture to the outside world. The
new Kazakh elite, especially the young business people and lawyers with
whom most foreigners deal, are able to function in a global environment.
The kinds of skills that they demonstrate—fluency in English and a knowl-
edge of market economics—are not representative of the population as a
whole. These skills can be acquired only in a few elite schools and institu-
tions, which are accessed through connections or by extraordinary merit.
Almost all these schools are in Almaty. The practice of bribing admission
committees and paying for diplomas is becoming more common as well,
and respondents in a 1998 survey of students listed dishonest practices in
schools as a major concern.141

The Elderly and the Disabled

The country’s elderly are also suffering. Pensioners have been increasingly
more disadvantaged since independence than any other group. As already
discussed, the country began an ambitious new pension program on Janu-
ary 1, 1998. While this may better protect a future generation, it has not
helped the government deal with the problems of the growing number of
elderly who live in Kazakhstan. Their numbers were artificially reduced
through the adoption of this legislation, when the retirement age went to
sixty-five for both men and women (from sixty-three for men and fifty-
eight for women), a change that substantially added to the number of hid-
den unemployed.142 Yet the government has been tough on those who try
and organize the country’s pensioners.143 Kazakhstan’s disabled population
has fared poorly as well, and helping them seems to be of no particular pri-
ority. In 1997 the government budgeted 413 million tenge to celebrate the
anniversaries of Auezov and Turkestan.144 At the same time, it allocated
only 8 million tenge for people disabled by or who have lost a breadwinner
to an ecological calamity.145

The Division between Believers and Nonbelievers

As the population becomes poorer, the potential appeal of extremist ide-
ologies becomes greater, especially that of radical Islam, which generally
Martha Brill Olcott | 207

cloaks its appeals in terms of righting socially inequitable situations. Presi-
dent Nazarbayev and his senior political advisers have always seen the man-
agement of religion as an important part of state building.
In many post-Soviet states the return to observance of a traditional and
customary faith was taken as a sign of recovery. In Kazakhstan, religion has
always been viewed as a potential source of opposition and a force that
might stimulate interethnic conflict. The state has always closely monitored
the activities of foreign religious organizations, fearing their seditious influ-
ence. Homegrown groups were usually viewed as acceptable; it was thought
that their leaders understood the country’s precarious interethnic situation
and historical and cultural peculiarities. Initially the government took a rel-
atively hands-off attitude toward Islam. Kazakhstan’s security organs were
more concerned with the activities of the various Protestant Pentecostal
missionaries, those of Reverend Moon, and such groups as the Deva Maria
cult since their activities seemed alien and at odds with Kazakhstan’s “tra-
ditional” faiths, Islam and Russian Orthodoxy. Eventually Judaism was
added to this list as well, when the trickling in of Russian capital from Israel
turned into a flood.
Since the late 1990s Kazakhstan’s leaders have become much more
focused on the activities of Muslim missionaries. While hundreds of
mosques and religious schools have been built in Kazakhstan over the past
dozen years with funds from foreign countries (mostly from Turkey and
Saudi Arabia), any foreigner not part of an official delegation who is caught
“propagating” Islam is subject to rapid expulsion. Moreover, the Kazakh
leaders seem to be offering a broader interpretation of what is included in
missionary activities and have deported many people with little cause,
including some who have come to visit relatives in Kazakhstan. In 2000 the
government also began to recall students studying abroad in various Islamic
academies and universities that were considered to be of a questionable
nature.
The claims that religion makes upon adherents, particularly the insistence
that true believers should not distinguish between private and public behav-
ior, seems to unsettle the Kazakh government profoundly. In Kazakhstan the
dictates of conscience cannot take precedence over those of the state, and
religion is considered to be a private matter that cannot influence education
or politics.
The Kazakh leaders fear Islam far more than they do Russian Orthodoxy.
Islam remains the most visible religion in Kazakhstan. Ninety percent of the
208 | A Divided Society

country’s self-proclaimed religious believers profess Islam, and 1,150 of the
country’s 2,299 religious institutions are in some way associated with
Kazakhstan’s Muslim Ecclesiastic Administration.146 Kazakhstan’s officials
often take great pains to put Russian Orthodoxy on at least near equal foot-
ing, and the country has 220 parishes and monasteries. In fact, President
Nazarbayev was awarded the Order of Dmitri Donskoi by Patriarch Aleksei II
(of all Russia) for the Kazakh leader’s support of the restitution of Russian
Orthodox institutions and practices in his countries. Other Christian groups
periodically complain that they find it difficult to get state registration. By
contrast, given the official desire to please some of Kazakhstan’s industrial
magnates, in recent years it has become easy for Jewish organizations to reg-
ister in Kazakhstan. Although Kazakhstan has only 15,000 Jews left in the
country and many of these plan to emigrate to Israel or the United States,
the country has two active Jewish organizations, one sponsored by Alek-
sandr Mashkevich of the Eurasia Group and the other by Lev Leviev. The lat-
ter organization, associated with the world Lubavitcher movement, even has
branches in eighteen cities in the country.147
The growing role of these Jewish figures serves as yet another reminder
of the secular nature of the Kazakh state. So too do Kazakhstan’s close ties
to Israel, illustrated by Nazarbayev’s well-publicized trip there in April 2000
that included meetings with potential large investors as well as leading
Israeli officials. By this time it was already clear that there was not much
investment capital forthcoming from Israel’s Arab rivals, but Nazarbayev
was careful to meet with Arafat as well.
Now Russian Jewish capital occupies such a prominent position in the
country that it would be difficult to reorient Kazakhstan’s foreign policy in
the absence of a substantial redistribution of currently privately held assets.
The prominence of Jewish investors is a constant irritant to Kazakhstan’s
small but more radical Muslim population and gives them a classic anti-
Semitic formula around which to rally support.
There are many other reasons for the Kazakhstan government’s nervous-
ness about Islam. Initially the government feared that a surge in the public
practice of Islam would intensify problems with the Russian and Cossack
populations. With time, the risk of this has grown fainter, but a concern over
the potential consequences of an Islamic revival for Kazakhstan’s foreign
image has grown as terrorist acts by extremists have become a major focus
of international attention. Kazakhstan, for example, has pursued a relatively
independent stance toward Iran, a posture that would have had a real
Martha Brill Olcott | 209

impact on United States–Kazakh relations had the secular credentials of the
nation’s leadership been in doubt.
The greatest concern of Kazakhstan’s leadership is with its perceived fit-
ness to rule in the face of a major religious revival among the population it
governs. The current ruling elite, most of whom are highly secularized and
Europeanized, would clearly be unacceptable to a population that is strongly
influenced by devout Islamic believers. Nursultan Nazarbayev even used to
boast of being an atheist, and although he no longer makes such state-
ments, he could never transform himself into a credible spiritual guide for
a devout population.
There seems to be no danger that he will be called upon to do so anytime
soon. Kazakhstan is the only Central Asian state that can truly call itself sec-
ular since it is the only state in the region that has not accorded Islam a spe-
cial legal role. Still, it is hard to imagine that Kazakhstan will be able to
maintain this position indefinitely, given the greater visibility of Islam in its
neighboring states. At the same time, the specter of Islamic radicalism in the
region is real, making the Kazakh rulers’ defense of the secular nature of
their society potentially more divisive.
The government has tried to deal with this by maintaining the Soviet-era
distinction between religion as tradition and religion as faith, emphasizing
the former while trying to restrict the latter to a matter of individual con-
science. Muslim names, beliefs, and practices (often corrupted by or com-
bined with pre-Islamic practices) are an integral part of Kazakh identity.
Traditional Kazakh Islam retained many more pre-Muslim features than did
the practice of the faith in the cities of Uzbekistan and southern Kyrgyzstan
since the conversion of the Kazakh people was not completed until the
eighteenth century. Further, the Kazakh nomadic life led worship to be
more ritualistic than doctrinal. The Kazakhs lacked the elaborate systems of
religious schools, shrines, and quartal (Muslim quarter) organizations that
characterized the community of believers farther south. For this reason, the
Nazarbayev government was optimistic that it could shape the develop-
ment of Islam in independent Kazakhstan, and it hoped that official
attempts to strengthen and encourage Kazakh identity would blend rather
naturally to support “good” Islam, which it defined as traditional Kazakh
culture and family practice.148
For nearly a decade of independence, Kazakhstan’s rulers were able to
proceed with a policy toward Islam that largely equated it with a locally
based cultural system that had only rather tangential ties to global Islam.
210 | A Divided Society

These were to be orchestrated as much as possible by Kazakhstan’s state-
appointed religious authorities. The management of Kazakhstan’s Islamic
establishment was turned over to Ratbek-kazi Nysynbaiuly, who had
changed his name from Nysanbayev in January 1990 when Kazakhstan’s
Muslim Ecclesiastic Administration began to function as an independent
body. He held this post until June 2000, when he was replaced by Absattar
Derbisaliyev, who had previously served as a diplomat at Kazakhstan’s
embassy in Saudi Arabia. Although he was trained as an orientalist, he lacks
formal religious education. Mufti Derbisaliyev was appointed to keep a firm
hold over the country’s religious believers, and there is no way that they can
think of him as one of theirs.
Throughout his tenure in office, Mufti Nysanbayev allowed his under-
standing of Islam and its needs to be more shaped by the government than
by the congregation he was appointed to serve. He was no friend of Islamic
radicals, and in 1991 he was attacked in his office near an Almaty mosque
by a group of dissident Muslim activists who were members of the nation-
alist Alash party.149
Yet, perhaps surprisingly, the decade following this attack was peaceful
in its civil-religious relations, this in a part of the world where there has been
much religious-inspired violence. Still, although Islamic radicalism poses no
direct threat in Kazakhstan, in the past few years the government has begun
to think that it may pose an indirect one. In 1998 so-called Wahhabi mis-
sionaries (the usual term for Islamic activists) were arrested in Kazakhstan.
These included a group of six missionaries from Pakistan.150 Missionaries
from Egypt, Sudan, and Jordan have been charged with crimes, a Turkish
citizen was reprimanded for teaching Wahhabism, and an Uzbek citizen was
deported for religious activities.151
Kazakhstan’s persecution of religious believers increased after the Feb-
ruary 1999 bombings in Tashkent and the siege in Kyrgyzstan’s Osh oblast
in the summer and fall of 2000.152 These events have also led the Kazakh
government to increase its spending on defense and internal security.153
Kazakhstan has taken a firm position against Islamic extremism. When Rus-
sia was considering air strikes against Afghanistan in May 2000, Kazakhstan
announced that it might allow overflights for Russian aircraft.154 Kazakhstan
has also advocated CIS security directives aimed at eradicating Islamic
extremists in Central Asia and supported strengthening the CIS Collective
Security Treaty in 2001 by creating a multinational force designed to help
Martha Brill Olcott | 211

contain extremist-inspired terrorist threats. Nazarbayev also quickly offered
support for U.S. George Bush’s war against terrorism.
The government has visibly expanded the role of security forces in
Kazakhstan society since the rise of the Islamic threat in the region, and in
June 2001 former Minister of the Interior Kairbek Suleimenov was
appointed as the commander of the country’s expanding internal security
force. Before that the government had closed what it claims to be training
camps of Islamic militants in the mountains outside Almaty, and in January
2001 it set up a new special antiterrorism force. Some observers claim that
these arrests were the too-convenient actions of a government determined
to prove that a threat existed.155
There is no question, however, that Islamic missionaries have been active
in all parts of the country, and mosques and religious schools have been
opened in even the most Russified of Kazakh communities. Still, mission-
ary activity is not the same as the propagation of militant Islam. That most
Kazakhs had little knowledge of Islam at independence makes all the more
significant the growth of religious observance. A July 1996 survey and analy-
sis at the Institute of Development speaks of a growth in the number of
Islamic institutions in the republic from forty-four in 1989 to more than six
hundred in 1996,156 and as already noted, the number of formally registered
institutions has doubled since then.
Nearly all observers agree that Kazakhstan’s Islamic revival has had the
greatest societal impact in the southern part of the country, especially in the
areas that border Uzbekistan and where Kazakhstan’s Uzbek population is
concentrated. Local Uzbeks seem to have served as a catalyst. The same
1996 survey found that Uzbeks were the most religious group in
Kazakhstan, with 75.8 percent of respondents denoting themselves as
believers, compared with 39.7 percent for the entire population and 47.1
percent for Kazakhs. The term believer is a vague one and may connote lit-
tle more than a self-identification with Islam or adherence to a fundamen-
talist sect. This makes it even more interesting that the largest group of
Kazakhs that identified themselves as believers were those who were in the
age bracket 18 to 29. That argues for something more than cultural conti-
nuity and is evidence of Kazakhstan’s religious revival. In addition, the great-
est proportion of believers was those with secondary, technical, or
incomplete secondary education. Only 15.8 percent of those claiming to be
believers were people with higher education.
212 | A Divided Society

It is possible to read too much into such figures. Nevertheless, they do
suggest the pressures that are very much in evidence elsewhere in the Mus-
lim world. The attraction of Islam, and particularly of the strict observance
of the faith, has been strongest in those societies that have large, poor, and
very young populations. As noted above, the course of economic and social
differentiation since independence has brought conditions in Kazakhstan to
resemble those in other societies where the tug of Islam is strong—partic-
ularly in the southern oblasts that are the republic’s poorest, most populous,
and most heavily Kazakh. More recent studies have drawn similar conclu-
sions. A 1998 survey of university students in Shymkent reported that 80
percent of the sample claimed to be believers. Yet more than half of these (44
percent) said that they went to the mosque only once a year. This shows that
the extent to which identification with Islam is seen simply as an aspect of
national culture. The understanding of Islam, and of its role in the national
culture, can change over time, and since 11 percent of those surveyed said
that they believed that the development of religious fundamentalism in
Kazakhstan was inevitable, there is certainly an important constituency that
believes that religion is likely to play a much greater role in the life of the
country over time.157
A nationwide study of nearly two thousand adults commissioned by the
USIA in August and September 1997 had similar findings.158 Here the ques-
tion was posed in terms of whether the government should be based on Mus-
lim Shari’a law. Thirty percent of the Muslims surveyed said that it should,
while 55 percent preferred to be ruled by secular laws.159 Seventy-seven per-
cent of the Muslims surveyed said that they were believers, but fewer than half
(48 percent) could name a single pillar, or obligation, of Islam. Still, an over-
whelming majority of the Muslims interviewed (61 percent) said that Islamic
religious leaders should play a large role in Kazakhstan’s public life. In this
study the term Muslim was used to denote anyone of Muslim background, and
not only a religious believer or practitioner.
This is not to suggest that Kazakhstan is in danger of “going Muslim” in
the near future. The Kazakhs of tomorrow are likely to be much more dif-
ferentiated one from the other than they are today. In the specific case of reli-
gion, this differentiation in faith could easily acquire overtones of political
and economic competition. The orientation of the winners of Kazakhstan’s
economic transformation is overwhelmingly toward Europe and the West.
Many, like President Nazarbayev himself, are still Soviet-era bureaucrats
who tend to equate religion, and especially Islam, with backwardness or
Martha Brill Olcott | 213

ignorance, while others, especially the younger members of the elite, tend
to characterize Islam by the restrictions it places on public behavior, the way
women must dress, and what people can eat and drink.
As the differences between the educational and economic levels of young
Kazakhs grow, it will be more and more tempting for the large group of
those without luxuries, benefits, or hopes to attack the much smaller group
of the privileged on the grounds of the latter’s alleged religious impiety. It
will be equally easy for those lucky few to interpret the challenge to their
position at the top of Kazakhstan’s society as springing from religious dem-
agoguery, rather than from a predictable response of a dispossessed people
in a society that has rapidly become inequitable.
7

Can Kazakhstan Regain Its Promise?

azakhstan, just as most of the other states born of the collapsed USSR,
K is still something of an international novelty. Its existence is recent
enough that analysts tend to concentrate much of their attention on fore-
casting the country’s future, trying to determine from the nation’s inventory
of actual and potential assets and liabilities what kind of country Kazakhstan
will be in another decade and beyond. Suggestions have naturally varied
widely, depending on whether one chooses to emphasize Kazakhstan’s enor-
mous wealth that could be shared among a small population, or whether
one underscores Kazakhstan’s demographically riven society and its venal
ruling elite.
Generally underlying both the negative and positive scenarios is the
assumption that the United States is able to do something about shaping the
course of political and economic developments in Kazakhstan. The coun-
try’s relative newness creates a perception that the state of Kazakhstan is
rather like a figurine that has been sculpted out of clay but not yet fired, so
that it can still be shaped and reshaped for a while. Although foreign actors
may still have some input, the time of their maximum potential effectiveness
may well have passed.
Ten years into statehood Kazakhstan’s political and economic structures
are growing more fixed, even if there is some elasticity left in the system.
Much can happen in a decade. Kazakhstan has been independent longer
than Mikhail Gorbachev’s entire tenure as head of the Soviet Union or the
whole of World War II. This period is sufficiently long to allow us to at least
observe a pattern in the way that issues are addressed and responses are

214
Martha Brill Olcott | 215

framed. Each decision taken or ignored, each policy promulgated or aban-
doned, reduces the potential choices available for Kazakhstan’s unrealized
future, just as each step taken by degrees becomes a path, along which
future options inevitably grow fewer, even as they grow defined.
This is not to suggest, however, that Kazakhstan has passed, or indeed is
even approaching, any sort of Rubicon. One of the most striking features of
the post-Soviet period, and especially of recent years, is the way that the
tempo of history in the former Soviet republics appears to have slowed, cer-
tainly in comparison with the frenzy of the years from 1989 to 1991. The
first catastrophes of economic collapse, currency creation, population trans-
fer, and intra-elite competition are over, leaving political environments that,
in most of the new states at least, seem relatively stable for the indefinite
future, at least in comparison to many other states.
Yet the seeds of the country’s future problems have already been sown.
The formal collapse of the Soviet Union was brought about by a sharp series
of crises, but only because the system was made vulnerable by the slow
accumulation of problems unsolved or ignored during long decades of
apparent stability.
The state-building process in Kazakhstan can be considered either a fail-
ure or a success, depending on the criteria adopted. The country still exists
and seems in no danger of disappearing from the international community
any time soon. Russia, now under two presidents, has accepted the idea of
Kazakhstan’s statehood, and with every passing year it seems less likely that
some future Russian regime will challenge this status quo. Prospects for
improved Russian cooperation with the United States and Western Europe
should add to Kazakhstan’s growing sense of security.
The Kazakhs will always remain wary. Nationalism is a powerful mobi-
lizing tool in Russia, and it seems certain to stay so for a while, until that
state becomes competent to meet its social obligations and the country’s
economy has been restored. The armed forces of Kazakhstan are no match
for those of Russia, and the Astana government must hope that international
pressure will keep a potentially belligerent Russian government from behav-
ing aggressively, if reform in Russia were to be derailed. This is one reason
that Kazakhstan has tried to create so many foreign stakeholders in its nat-
ural resource development projects; powerful Western energy companies
bring with them the enhanced possibility of important diplomatic support.
Leaders in Moscow or maverick elements in a weakened Russian secu-
rity apparatus are still capable of creating complex provocations that could
216 | Can Kazakhstan Regain Its Promise?

push restive elements in the local Russian population into using force to
convey their displeasure. To date, though, they have declined to do so in any
significant way, and the Russian government seems to be accepting the pref-
erence of Kazakhstan’s own Russian community to leave the country rather
than to protest its exclusion from Kazakhstan’s political life. The sense of res-
ignation that prevails in the Russian community has contributed to the vir-
tual absence of bloodshed in the country. From the point of view of the
Kazakh elite, this is already a great victory and is more than most Kazakhs
expected several years ago.
Independence has also led to an unexpected accumulation of economic
power by a small elite that believed it could translate political power into
economic wealth but never envisioned the scale on which this was possible.
There has been an economic revolution of sorts in Kazakhstan, and priva-
tization has gone further here than in most post-Soviet states, as has the
introduction of a legal infrastructure necessary to support foreign invest-
ment. At the same time, the majority of citizens are living in more strained
circumstances than they were before independence; official statistics claim
that roughly half the population lives below the poverty line. This creates
new political risks for the regime because economic power has not been dis-
persed equally throughout Kazakhstan’s society.
Initially, the government had a simplistic view of how the transition
would occur and hoped that it could translate the country’s considerable
natural resources into an ample state treasury. The idea was that if there was
enough to go around, no one would care too much that a small elite had
amassed a vast amount of political and economic control. The new National
Oil Fund may well serve its stated function of using oil revenues to stimu-
late economic development and to help the government meet its social
obligations. Nearly a billion dollars had been deposited in it by July 1,
2001, and the government plans the fund to reach $1.5 billion by the end
of 2001. The transition to a market economy, however, has proved far more
difficult than anticipated, and the perquisites associated with it far grander
than anyone dreamed at first. Frightened that it will lose power, the elite has
been trying to shape new political institutions that will maximize its control.
This creates a potentially dangerous situation for the future, especially as
efforts to inculcate patriotism in people are proving far more challenging
than the leaders anticipated.
The Nazarbayev family has become the dominant economic force in the
country, with tentacles that reach into every part of the economy. They are
Martha Brill Olcott | 217

not just interested in stripping Kazakhstan of its wealth. While some of the
money it skims from the economy is clearly going offshore, the ruling fam-
ily is also committed to keeping part of its assets as working capital. The
family recognizes that to do this it needs to encourage foreign investment,
which in turn means that there must be some level of transparency in the
way that the country’s new companies do business. As a result, Kazakhstan
is developing a small class of independent entrepreneurs whose activities are
sometimes hampered but who retain the hope that the conditions under
which they do business might still improve. Yet in many important respects,
economic power is more restricted today than it was before, although it is
a local elite that dominates—not one sent from Moscow.
This is somehow intended to be reassuring to Kazakhstan’s citizens, as
though moral superiority is somehow accrued through the transfer of power.
To try to convince people of this, the government has developed an official
ideology that stresses the importance of the Kazakhs’ being in charge in
their own home. This is being done with a certain amount of sleight of
hand since the same person who was to protect Moscow’s interests,
Nursultan Nazarbayev, is now alleged to be the recipient of the national
trust. The emphasis is on developing a sense of symbolic control rather
than on empowering the population. This strategy has pushed the ruling
elite to embrace policies that stimulate ethnonationalism rather than mul-
ticulturalism because that best serves their ends.
Nazarbayev and his close allies have used their accumulated power for
personal advantage and have given relatively little thought to creating polit-
ical institutions that will facilitate an orderly transfer of authority. Instead,
their actions have made the inevitable transfer of authority more difficult.
The opportunities for expressing political displeasure have grown limited
over time, as the country has gone from a fledgling democracy to a state that
is more interested in imitating democratic institutions than in implement-
ing them.
President Nazarbayev has successfully manipulated the country’s electoral
system so that it should enable him to rule for life, but he has not yet satis-
factorily addressed what will happen when he must inevitably pass from the
political scene. Unlike the president of Turkmenistan, the Kazakh president
seems to suffer no illusions of immortality, and there is mounting evidence
that he would like to transfer power to another member of his family, prefer-
ably in his lifetime, so that he can orchestrate a successful transition. Since
Nazarbayev has no sons, this complicates the prospects for a dynastic
218 | Can Kazakhstan Regain Its Promise?

succession but does not eliminate the possibility. Even if Nazarbayev suc-
ceeds in passing power to a relative or in-law, eventually Kazakhstan will
have to confront the limitations of contest and competition in the political
system that Kazakhstan’s first president has created.
The current elite structure resembles that of a society at risk of a messy
succession struggle. There are several potential successors and no institu-
tions in place to regulate their claims. No one would claim that Kazakhstan
is currently on the brink of a civil war, but it is clearly a state in stress.
Violent crime has risen during the past decade, and the murder and sui-
cide rates have risen substantially. Greater government attention to crime
fighting has had some effect, although the manipulation of official statistics
may exaggerate the impact of such improvements.1 Criminal gangs have
become deeply rooted in Kazakh society. The narcotics trade is flourishing
throughout Central Asia, and Kazakhstan is an important conduit, further cor-
rupting the country’s security organizations.2 At their worst Kazakhstan’s secu-
rity organizations are like semi-autonomous agencies, openly seeking bribes
from all who traverse their territory. This atmosphere of lawlessness has caused
rivalries, and the police and security forces have sometimes openly and vio-
lently clashed.3 Police brutality is also said to be a serious problem.4
As earlier noted, the security forces have been reorganized to address
these problems, and the recentralization of authority that has been intro-
duced substantially lessens the prospect that the country can split into com-
peting armed camps, especially given the expanded control exerted by
Rakhat Aliyev and other members of the Nazarbayev family. Still, these
efforts do little to address corruption at the grassroots level and nothing to
eliminate the underlying societal malaise that caused such incidents.
The Kazakhs are developing a new legal system, and Kazakh lawyers
and judges are receiving Western training. There is no real rule of law in the
country, however, since no one really expects the legal system to afford any
protection. Corruption remains pervasive, and influence can be purchased
at all levels of government. In Kazakhstan it is often difficult to distinguish
between law-abiding citizens and criminal offenders because even the best-
intentioned must resort to bribery to protect property and family. With
time, criminal and noncriminal behavior has begun to blend in Kazakhstan.
Those who do not find ways to bend the rules are simply unable to func-
tion in Kazakh society or to provide for their families.
Societies that have such flawed legal systems and that lack well-
established political parties, independent trade unions, and other political
Martha Brill Olcott | 219

and social organizations often have difficult transition struggles. In the
absence of political institutions to regulate the process, President Nazarbayev
is simply hoping that his recommendation of a political successor will suf-
fice. If Nazarbayev is to succeed in transferring power in this fashion, he must
increase public confidence in his judgment by demonstrating that his prior-
ity lies with the people formally entrusted to his protection.
The population’s expectations of the government obviously have to be
reshaped from what they were during the Soviet period. The burden of
social welfare has shifted from being exclusively a responsibility of the gov-
ernment to a burden shared with the individual. This shift may have been
necessary to allow Kazakhstan to reduce public spending and stimulate
economic growth, but such a change in expectations is easier when the
government enjoys public confidence.
Kazakhstan’s government has devoted considerable resources, especially
in its early years, to various patriotism-building efforts, but political social-
ization does not exist in a vacuum. The credibility of the Nazarbayev gov-
ernment is affected by how much people’s lives have deteriorated since the
government came to power and whether it is seen as responsible for it.
The words of rulers are often at odds with their actions. It is hard to imag-
ine that Kazakhstan’s ordinary citizens are not disturbed by the behavior of
Kazakhstan’s governing elite. The typical Kazakh family includes people
who are unemployed, on a pension, or in some way dependent on social
welfare payments. In 1996, for example, when pension arrears were still
commonplace, 2.5 billion tenge went astray, presumably siphoned by cor-
rupt officials for their personal use. Ordinary citizens may not have known
about it, but they were certainly aware of such common practices as divert-
ing electrical and heating lines intended for factories to the private homes
of officials; giving automobiles intended as prizes for top workers to factory
officials; and using credits to factories for the purchase of homes and trips
abroad and for private investment by state and industry officials. These
practices are well established and are known through rumor, partially cor-
roborated by press accounts.
The behavior of many of Kazakhstan’s public figures so flagrantly violates
the spirit of state building expounded by the government in solemn-sound-
ing ideological pronouncements that only the most ardent patriots can be
moved by the official rhetoric. Even their fervor is likely to be dampened by
the spectacle of prominent nationalists who have been bought with comfort-
able government sinecures. Kazakhstan’s leaders have not demonstrated civic
220 | Can Kazakhstan Regain Its Promise?

responsibility. Rather, the model of public behavior ascendant in Kazakhstan
is one of self-aggrandizement and self-enrichment, no matter the cost to the
state, to its further development, or to one’s fellow citizens. In such an atmos-
phere, the creation of “Kazakhstanis,” a population who view themselves as
sharing interests and duties with the millions of others with whom they share
the territory of the republic, is a difficult, if not impossible, process.

Looking Ahead

State building is a complicated business. Nazarbayev’s willingness to
advance personal gain over public good has made it more difficult in
Kazakhstan. Kazakhstan had a real chance to carve for itself a separate
national identity—not simply one that stressed the distinctiveness of Kazakh
history and culture from that of the history and culture of other peoples in
the region. Kazakhstan could have become a secular multi-ethnic demo-
cratic state with a thriving market economy. Many of the preconditions for
this existed when the country received independence, including a diverse
and well-developed economy, a highly skilled and educated population,
and the beginnings of independent media and independent political groups.
Although Kazakhstan could never have achieved the twin goals of
democratization and market reform in the space of a decade, it wasted the
opportunity to make genuine strides in that direction. While the govern-
ment may not have done irreversible harm—and it is certainly too early to
talk about the squandering of Kazakhstan’s statehood—the country’s rulers
have not made the most of the opportunities that fate and good fortune gave
to the Kazakh people for the public’s benefit. Instead, they have judged
themselves by the yardstick of what rulers were doing in neighboring states
and found the comparisons to be in their favor.
The political economy literature is filled with articles about whether
resource-poor nations do better than resource-rich nations. Poorer nations
are said to avoid the perils of a resource-dependent and export-driven econ-
omy. 5 Still, it would be a gross oversimplification to argue that had
Kazakhstan been poorer, its leaders would have been more honest. The pat-
terns of official corruption that have developed in Kazakhstan are repli-
cated throughout the former Soviet Union and are found in other parts of
the post-Communist world as well. Even in resource-poor states, leaders
find ways to extract “rents” from the economy and use their political power
Martha Brill Olcott | 221

to create economic resources—such as profiting on the difference between
official and unofficial exchange rates and skimming money from the drug
trade—when few are naturally available.
Kazakhstan’s economic diversity remains a source of future national
strength, and while its potential has not been realized, nor has it been
squandered. The opportunity for maximizing popular involvement in the
economic transition has been missed, while the threshold that independent
entrepreneurs have to surmount is continually being raised. Lost political
opportunities seem greater still. The aspirations for representative govern-
ment that were stimulated in the late Gorbachev years are steadily dimin-
ishing. With them the hopes that Kazakhstan can become a culturally
diverse society in which citizenship and not ethnicity confers political sta-
tus have also grown dimmer.
Kazakhstan is becoming more mononational, and ethnic Kazakhs are
serving as the source of the country’s new national identity. Simply desig-
nating a group of political winners gives little substance to a national iden-
tity. Kazakh history is being mined for suitable lessons. It can serve as a
basic code of morality, but it cannot serve as a handbook for state build-
ing. Other sources need to be found to fill the gaps. Kazakh leaders must
do more than create a new national identity. They must also undo the old
one. The old hybrid Soviet identity, which was simultaneously part eth-
nonational and part supra-ethnic, is dying out, without anything particu-
larly concrete taking its place. Russians, and even some ethnic Kazakhs,
may still be nostalgic about the Soviet past, but they are realizing that there
is no recapturing it.
The slow collapse of Soviet mass information networks may have made
the process of political reidentification longer than might originally have
been expected but no less inevitable. The young people of tomorrow—who
will no longer share army service, university dormitories, or even, in many
states, common television programs—will know much less about one
another than did the generation before. Human nature being what it is, it
seems probable that this ignorance may also make people less tolerant of one
another. The way history is being taught will heighten this intolerance. The
Kazakhs are now free to define their history as they please. Like most new
nations, they are doing so in ways that irritate their neighbors and even one
another. Each of the region’s major peoples can claim historic roots that go
well beyond current borders and groups in power. Each country can rewrite
the past to emphasize its own special role.
222 | Can Kazakhstan Regain Its Promise?

Had it been redefined deliberately to emphasize common core values, the
shared Soviet experience might have been a building block for a multi-
ethnic form of national identity in Kazakhstan. Instead, that identity is fad-
ing. Knowledge of the Russian language will provide a cultural affinity for
all Kazakhstan’s peoples, especially since Russians and other Slavs will con-
tinue to make up about between a fifth and a quarter, respectively, of
Kazakhstan’s population well into the future. The role of Russian culture is
certain to be continually redefined, in part because the old Soviet-era insti-
tutions necessary to maintain Russia’s central cultural role are disappearing.
The Kazakh culture will continue to assert itself, but the collapse of
shared institutions across the former territory of the Soviet Union has also
meant the collapse of those institutions within each new state. The old
Soviet-era museums, libraries, and cultural centers are gone. As these have
vanished, little has emerged to replace them, even in Kazakhstan, where the
local governments are not as financially limited as in many other countries.
Some showplace museums have been built and new monuments erected to
commemorate Kazakh statehood, but the kind of cultural penetration to the
remotest parts of the country that was a defining feature of the Soviet Union
is a thing of the past. At the same time, many in Kazakhstan are more closely
integrated in the global culture than at any time before. These people have
new tools at their disposal. Those who can afford it are free to study and
travel abroad, and even ordinary people living in the country’s leading cities
often enjoy access to a wider world through the Internet.
Today the experiences, worldviews, and, ultimately, future prospects of
the young people within Kazakhstan are also diverging in ways that were
never true in the Soviet past. The gap between rich and poor is growing, as
is the difference in the life experiences of urban and rural populations. The
state has mandated a uniform education system, but not the funds to pay
for it, and educational standards vary greatly today, far more than in the past.
The children of the elite go to private schools, while many in the country-
side do not have the money for the clothing necessary for year-round school
attendance. The old state transportation system is being replaced by a far
more costly private one, and most of Kazakhstan’s citizens can no longer
afford to travel freely across the country, an ability they used to enjoy.
National media now dominate the airwaves, but many communities provide
electricity sporadically, or with interruptions, and few Kazakhs in the coun-
tryside have the money to replace old Soviet-era televisions and radios when
they inevitably break. Thus the Kazakh youth of the future will be more
Martha Brill Olcott | 223

ignorant not only of their neighbors in Russia and elsewhere, but are equally
likely to be ignorant of one another, their own compatriots.
The old Soviet identity was shaped by three generations of shared expe-
riences, shared curriculum, and the pan-Soviet entertainment and infor-
mation industry, which reached to the most distant localities. The elements
of this shared Soviet identity linger, even if the state itself has disappeared,
and have helped to keep the post-Soviet environment mostly free of ethnic
tension, given the number of points of potential conflict that exist. The elite
of the various states, for all that they disagree on fundamental issues, share
a common language not only in the literal sense, since they are all still most
comfortable speaking Russian (at least in their official interstate capacities),
but also in the broader sense of knowing the same songs and jokes, recall-
ing the same slogans of the past, and, in general, sharing similar assump-
tions and worldviews, whatever their ethnic heritage.
An attempt has been made to transform the Kazakh cultural identity into
a national ideology, in part to serve as a substitute for those integrating expe-
riences and institutions. Yet this ideology remains formless and inchoate and
could devolve into more elemental forms of identity. A state ideology based
on Kazakh history and culture will not appeal to Russians and most other
non-Kazakhs, although there will be fewer young Russians and other Euro-
peans in Kazakhstan in fifteen to twenty years than there are today.
It is far from clear whether the current environment can facilitate the cre-
ation of a shared identity among the Kazakhs themselves, one sufficient to
serve as an ideological glue to keep together a stable polity. The Kazakhs
have no modern history of independent statehood. They were a loosely
defined ethnonational group whose elites were grappling with the question
of shared identity when Stalin decreed them to be a “nation” fit for repub-
lic status.6 Their fundament of loyalty was families and clans, people linked
to each other directly by blood, even though the horde structure became
more attenuated during the half century of Russian colonial rule. This is pre-
cisely why the Kazakh intellectuals who took up the question of their iden-
tity in the years before the Bolshevik Revolution differed about how—and
whether—they were to be differentiated from the other peoples of the steppe
region. Since that question was unresolved by the Kazakhs themselves, a
sense of allegiance to smaller subunits continued beneath the surface of
Soviet life and has reemerged since independence.
The interaction of Russian and Kazakh history has given the three hordes
different fates, both during the period of colonial rule and that of Soviet
224 | Can Kazakhstan Regain Its Promise?

power. It has left the families of the Great Horde in a position of political and
economic dominance in the republic. Independence is once again reshap-
ing the relationship between economic and political power and may be lay-
ing the foundation for the community to divide along subethnic lines, as has
occurred in many parts of Africa.
In Soviet days the control of the Communist Party was key. Patronage and
the pilferage of state assets had the value of economic goods and were a
perquisite of power. Independence has meant that the control of these assets
is up for grabs, except that now there is no one at the top watching how the
assets are managed or who is awarded ownership. As a result, the control
of Kazakhstan’s natural wealth has gone disproportionately to those who
began independence in charge of the state. These people have managed to
turn much of that wealth into their own personal property precisely because
of mechanisms afforded them by turning Kazakhstan into a quasi-market
economy.
The current economic structure is intrinsically an unstable one. In a real
market economy the relation between state power and economic power is
inevitably a dynamic one. Assets that are judged to have been illegally
acquired can be renationalized by successor regimes. Money sent abroad is
much harder to trace and reclaim. The ruling family has asserted control
over numerous valuable assets. If rumors are to be credited, they have a
dominant position in most sectors of the economy and are growing more
proficient at skimming profits from state-owned assets through the control
of their management.7
What will the family do with their dominant position? Will they try to
turn their wealth into transparent privately owned assets, in which case
they will have to continue to work toward the development of a legal sys-
tem in which others can also blatantly acquire and maintain assets? What
seems more probable is that they will use their continued control of the legal
system to introduce transparency only where necessary to meet unrelenting
foreign pressure and will seek to expand family control (both kin and
“court”) of the economy wherever possible.
As the oligarchical group’s share of Kazakhstan’s economy grows even
more, it is likely that its determination to continue the existing political
arrangements will grow apace, since it will have more to lose. The most
likely scenario for Kazakhstan’s immediate future is therefore continued
emphasis on stability, ensured either by not having elections at all or, if these
Martha Brill Olcott | 225

somehow need to be held, by holding them under conditions that will reduce
any uncertainty about their outcome to the smallest amount possible.
It is difficult to predict how long the Kazakh population will tolerate the
current situation. There has been an enormous redistribution of wealth in
Kazakhstan since independence. The gap in the incomes of the richest 10
percent and the poorest 10 percent was fourfold in the pretransition years;
by 1998, it was more than elevenfold. The richest 10 percent received 27
percent of the national income, while the poorest 10 percent received 2.3
percent.8 The current pattern of how the costs and benefits of economic
transformation are distributed across the republic could create widening
gulfs between the various populations in Kazakhstan, without providing
many institutions capable of bridging the gaps between the haves and
have-nots, or of ameliorating the hostilities that these gaps provoke. Dis-
advantaged people frequently seek an explanation for their failure to flour-
ish. It is probable that Kazakhs will notice, for example, that the
economically and educationally advantaged youth and young adults of the
next century are most likely to be members of the Great Horde, while the
poor and ignorant of the countryside, or of the dead factory and mining
towns of the north, are more likely to be from one of the Small or Middle
Hordes.
One should not exaggerate the amount of intra-Kazakh dissension that
already exists, or too strongly suggest that horde rivalries are the sole basis
of such intra-Kazakh tension. Nevertheless, many of the most heated polit-
ical battles in the republic to date have been between President Nazarbayev
and other Kazakhs. This tendency will increase over time.
It is natural for the focus of tension to be turned within the Kazakh elite,
for the Nazarbayev regime has made the reward for state capture enormous,
and the members of the elite are the ones who feel empowered by inde-
pendence to seize such opportunities. Hypnotized by the apparent threat of
the large Russian population and convinced that stability means, in the
words of a presidential spokesman, “no protest against the system,” it has
become easier for Kazakhstan’s elite to see the state’s interests as synonymous
with its own. This has led the elite effectively to sabotage from within what-
ever formal efforts have been made at political reform, and it may have
made the opposition elite and the general population alike doubtful of the
ability of Western institutions to serve as a basis for meaningful political
reforms.
226 | Can Kazakhstan Regain Its Promise?

President Nazarbayev has spoken frequently of the need for each nation
to develop its own brand of democracy and political culture. Yet the insti-
tutional arrangements available for power sharing are limited. This scuttling
of reform from within will make it more difficult to modify the political sys-
tem in an orderly or peaceful fashion in the near future. The people of
Kazakhstan seem to be aware of the pitfalls of the growing concentration of
power in the hands of a small elite and of a continued insistence that
Kazakhstan remain an undifferentiated “unitary republic.” A 1996 study
conducted by the president’s Institute for Strategic Studies found that 74
percent of respondents felt that there were too few political actors in the
republic, and 62 percent felt that there were too few economic actors. More
telling is that only 12 percent of the respondents felt that the entire spectrum
of political ideas was being represented in an organized way in the republic.9
Political power is becoming synonymous with economic power, as the
Kazakh state comes to resemble that of the world’s other raw material sup-
pliers, with a small native elite with enormous and growing personal wealth,
a chronically underfinanced state apparatus that relies on foreign borrow-
ing or the sale of natural resources to function, and a general populace that
grows poorer and more ignorant as it grows larger.
For better or for worse, Kazakhstan will probably move toward further
consolidation of the present system, which appears to lie somewhere
between autocracy and oligarchy. As noted earlier, the tendency in political
life in Kazakhstan, just as across much of the former Soviet Union, has been
toward the preservation of the existing elites, who grow ever more
entrenched as their finances improve. This is certainly the predominant
pattern throughout Central Asia. In Russia, at least, this preservation has
been maintained through elections that have been acknowledged, even by
those who have lost, to have been essentially fair. While conceding that the
electoral playing field is far from level because of the near monopoly on
information maintained by the ruling elite, experts on Russian politics point
out that this drive to control the media is itself a testament to the new
importance of elections, which have become the way that power gains legit-
imacy in Russia.
Even this limited respect for elections seems unlikely in Kazakhstan. Fol-
lowing the lead of the region’s other presidents, Nazarbayev has extended
his own term of office into the new millennium and has rewritten the con-
stitution to reduce parliament to little more than a cheering section, which
he can suspend at will if the cheering fades. Although continuing to work
Martha Brill Olcott | 227

through the formal structure of a government, Nazarbayev has also increas-
ingly resorted to rule by fiat. The cabinet reflects his will, and all the local
administrators must do his bidding. Political censorship may have tightened
since the first days of independence, and the republic’s security forces have
been more in evidence, but Nazarbayev has been able to accomplish a con-
solidation of his power without recourse to overtly despotic means.
He very much enjoys the trappings of power that come with being the
head of state of a potentially wealthy nation, which appears to shape his
political judgment. He is a proud man, and one who does not seem to take
criticism well. After being repeatedly humbled as a Soviet-era leader, this lat-
ter trait has become more pronounced with time. This means that he is cer-
tainly turning a deaf ear to any who seek to warn him of the dangers implicit
in his consolidation of economic and political power by the members of his
family. As this power grows, those willing even to contemplate discussing
the matter with the president are sure to diminish.
There is little reason for ordinary Kazakhs to support the establishment
of a Nazarbayev political dynasty, which would go against Kazakh cultural
norms and the political and economic interests of most ordinary citizens.
Similarly, other authoritarian or semi-authoritarian rulers have tried build-
ing dynasties, frequently leading to civil war after the death of the politi-
cal incumbent, when the designated heir fails to consolidate power
successfully.
Kazakhs may be publicly loath to criticize Nazarbayev’s consolidation of
power in the hands of his family because every good Kazakh is expected to
take care of his relatives. So Nazarbayev’s favoring of his various in-laws is
culturally reinforced behavior that has survived the decades of Soviet rule
with little modification. It would be wrong, however, to argue that dynas-
tic rule would somehow be a natural one given the Kazakhs’ history or their
socioeconomic and cultural evolution in the past two hundred years. It is
true that the Kazakhs were ruled by khans from the sixteenth through part
of the eighteenth century, but the system of noble rule deteriorated steadily
from that time until the mid-nineteenth century, when Russian colonial
officials abolished it. Kazakhstan’s three hordes managed to survive seventy
years of Soviet rule, albeit being transformed in the process. Prominent
families from the Small and Middle Hordes will not be willing to sit quietly
by if power and wealth were to become almost exclusively associated with
a Great Horde family. Nazarbayev has rivals within his own horde as well.
Of course, this leaves aside the fact that ethnic Kazakhs make up just slightly
228 | Can Kazakhstan Regain Its Promise?

more than 50 percent of the population and that key sectors of the economy
are controlled by other groups.
This said, Nazarbayev’s hold on power remains great. He might well be
capable of appointing a successor (from either within or outside of his fam-
ily) and have that choice confirmed by a majority of the Kazakh population.
This could be accomplished through popular referendum, because
Kazakhstan’s constitution has proved itself to be an elastic document.
Nazarbayev, though, lacks a natural heir. Much will depend on who
Nazarbayev chooses and whether the family is united in that choice. Some
have speculated that Nazarbayev may choose his younger brother’s son,
Kairat Saltybaldy, who to date has been an invisible figure in the country.
This would be a choice that would be closest to Kazakh dynastic tradition.
He could also choose a daughter. There are strong women in Kazakh history,
but no female rulers. The choice of a daughter would seem less fraught
with problems than that of a son-in-law. Nazarbayev’s daughter Dariga is
seen as doing well in her public appearances. She is said to have intuitive
political skill and could manage to reach out to leading elite groups in
Kazakhstan in an effort at constituent building that includes power sharing.
Dariga has the liability, however, of not being Nazarbayev’s biological daugh-
ter but Sara Alpysovna’s child from her first marriage.
Nazarbayev could choose a son-in-law, but picking one over the other
could spark heated competition between the separate elite groups that are
close to each of these men. The two already show signs of behaving more
like rivals than allies, and each is garnering supporters and assets to use in
rewarding them. Competition between the two heightened in November
2001, when Dariga’s husband, Rakhat Aliyev, was pushed out as deputy
head of the country’s national security forces by maneuverings of
Nazarbayev’s security chief, Marat Tazhin, a close friend of Timur Kulibayev.
Until then Aliyev controlled the country’s atomic energy industry, with its
uranium and uranium-processing plants, and he may even have been the
facilitator for some of the country’s burgeoning illicit arms trade.10 Timur
Kulibayev, the president of TransNefteGaz, is married to Dinara, who is
much less of a public figure.11 The son of a former Communist Party first
secretary from what is now oil-rich Atyrau, the youthful Kulibayev has a
powerful commercial empire under his direct control, including, most
prominently, exclusive oversight for the transport of all Kazakhstan’s oil and
gas reserves as well as shares in various other firms through his reported
stake in Kazkommertsbank. Kulibayev, though, still faces the challenge of
Martha Brill Olcott | 229

fully consolidating his position in Kazakhstan’s oil industry. Former Prime
Minister and Kazakhoil President Nurlan Balgimbayev is still a formidable
actor who would know how to use the Russia card to his own advantage.
Kulibayev has also been currying favor with some of the younger players in
Russia’s labyrinthine energy industry, and Russia’s competing elite groupings
are certain to be drawn into any succession struggle that might develop.
Elite politics in Kazakhstan are fluid, and blood ties are only one factor
among many. Much will depend upon whether Nazarbayev attempts to
transfer power during his lifetime or dies while in office.12 If the latter
occurs, the elite is sure to demonstrate its capacity to reorganize itself along
new lines. Family-based oligarchies, young entrepreneurs with Western
skills and contacts, those with ties to Russia and its economic elites, and crit-
ics of the president who have been grouped around the parliament, as well
as Nazarbayev’s vocal opponents living in exile, will all vie to improve their
positions. We have already seen some of the fluidity of Kazakhstan’s elite
politics after each change of prime minister. A fight for control within the
Nazarbayev political dynasty, even during Nazarbayev’s lifetime, would have
interesting and unpredictable outcomes as Nazarbayev’s two eldest sons-in-
law seek to enlist allies at home and abroad. This is not to say that the
country’s neighbors will be drawn in or that Kazakhstan will turn into
another Congo, but the potential for a rift within the Kazakh elite is strong.
Different factions could look for foreign patrons.

A Role for Foreign Patrons?

Any sign that succession is growing nearer will pique the interest of foreign
actors. A succession struggle gives new levers to powerful neighbors able to
provide security guarantees. All nations are dependent upon the goodwill
of their neighbors, but the situation with Kazakhstan, which shares one of
the longest open international borders in the world, makes the country’s
relation with Russia a defining one.
The passing of political authority to President Nazarbayev’s successor
will be a period of real risk to the country and might even contribute to the
country’s dismemberment if things should go horribly wrong. Nationalism
might surge again in Russia in a particularly aggressive form at a time when
Kazakhstan’s Russians seem intent on demonstrating that the plight of these
“Sudeten Russians” was beyond endurance. If all this were to occur, then
230 | Can Kazakhstan Regain Its Promise?

Russia might consider supporting a Russian Cossack–driven effort to declare
northern Kazakhstan autonomous in actions reminiscent of those that led
to the formation of the Transdniester Republic within Moldova.
This is highly improbable, however, given both the current international
climate and, what is perhaps more important, Russia’s own strategic prior-
ities as well as its military and economic fragility. Even in the unlikely event
that Russia were single-mindedly to encourage Russian separatist sentiment
with an eye to engineering the splitting of the republic along ethnic lines,
only a portion of Kazakhstan’s richest natural resources would pass to it.
Along with it would come the responsibility for feeding, housing, and
employing several million additional Russians, but leaving the most valuable
commodity—the Caspian oil—mostly in Kazakh hands. Even more daunt-
ing would be the international censure that Russia would certainly have to
endure; no matter how well staged, the annexation of any part of
Kazakhstan would be viewed as a Russian act of aggression. Unlike in the
case of Chechnya, such an act could not be explained away as an internal
problem. Added to this are the sheer technical problems of intervening, for
unlike Moldova in 1991, there are no Russian troops in place within
Kazakhstan to help orchestrate an insurrection. In fact, the trend in recent
years has been for Russia to try to expand the use of Kazakh forces rather
than Russian ones in situations that would provide for their mutual defense.
Thus, by behaving aggressively in Kazakhstan, Russia would be losing a
highly valuable potential ally and international surrogate.
There is also no reason to expect that the prospects of a leadership change
will lead to a major change in Kazakhstan’s current close relationship with
Russia. There is only so much that Kazakhstan can do to overcome the
problems presented by its geographic location, regardless of who heads the
country. As the world’s largest landlocked nation, Kazakhstan would find it
difficult to survive if Russia should ever choose to close its borders to the
passage of goods and materials in and out of Kazakhstan. Even today, Rus-
sia could easily cripple Kazakhstan economically and undermine any
Kazakh leader it disapproved of by introducing prohibitive rail tariffs and
transit fees and by turning border crossings into veritable bureaucratic
choke points.
All this would change if both Russia and Kazakhstan were to become
World Trade Organization (WTO) members. Even before this, the various
attempts to lessen the republic’s dependence on its northern neighbor are
slowly yielding results. Kazakhstan has engaged in oil swaps with Iran in
Martha Brill Olcott | 231

anticipation of future pipelines through that country; rail spurs have been
built, linking Kazakhstan through Turkmenistan to the south; a truck route
is being overhauled through western China to connect with roads in Paki-
stan, thus giving access to ports on the Indian Ocean; and there are oil
pipelines planned across China to feed the energy needs of the Far East. For
now, however, not one of these routes, is capable of moving anything like
the volume of goods and materials that Kazakhstan requires to survive.
Although the ties are weakening, Russia still has Kazakhstan bound at
both ends. Russia is Kazakhstan’s major or sole supplier of several necessary
commodities, but Russia is also Kazakhstan’s major customer for a variety
of finished goods and raw materials. Russia remains Kazakhstan’s primary
trading partner, responsible (in 2000) for 20 percent of the republic’s total
exports and for 49 percent of its imports.13 This relationship is changing, but
far more slowly than many may wish. No other state comes even remotely
near Russia’s significance as a trading partner for Kazakhstan. Indeed, both
Kazakhstan’s imports from and its exports to Russia alone roughly equal the
total volume of import-export trade with all of the other former Soviet
republics.
A reliance on trade with Russia has had a cumulative and negative effect,
especially given the large trade imbalance that Kazakhstan has inevitably
developed. In the short run, the cost of continued energy imports held back
Kazakhstan’s economic development and caused inefficient state enterprises
to fail that might have otherwise been successfully restructured. It added
incentives for enterprise managers to sell valuable stockpiles for personal
gain. Although Kazakhstan’s economic development will eventually be
served by its rising domestic energy prices—and the reconstruction of
industry is sounder for this—its accumulated debts have sometimes been
difficult to discharge.
Its debt for equity swaps brought powerful Russian industrial interests
ownership and management positions in Kazakhstan’s large factories, pro-
cessing plants, and even in primary resources, including some of the coal-
fields that feed Russian electrical generators in the Siberian rust belt. Russian
firms will probably remain stakeholders in Kazakhstan, although they have
begun to serve their own commercial interests rather than the more abstract
geopolitical ones of the Russian government. It is already difficult to know
the extent to which the Russian foreign policy establishment determines the
moves of partially privatized Russian companies like Lukoil and Gazprom
or whether these companies are now able to pursue their interests
232 | Can Kazakhstan Regain Its Promise?

independently, dragging Russian policy in their wake. The result for
Kazakhstan is the same; Russian companies have been able to stall negoti-
ations, force the redrawing of completed contracts, and insert themselves as
partners—increasingly with the introduction of capital—into deals already
agreed upon with other foreign investors.
With time such practices are growing less frequent. The Nazarbayev gov-
ernment, however, gets high marks for Kazakhstan’s growing level of eco-
nomic independence from Russia. This is a trend that any successor will try
to sustain. The country avoided becoming a puppet state, and it is becom-
ing more distinct from Russia and Russia’s economy with each passing year.
Even in the early years, the republic has stood firm on certain issues. It was
Kazakhstan’s refusal to pass its gold reserves to Russia that led to the collapse
of a shared ruble, just as its refusal to hand over the 1,360 nuclear warheads
that were stranded in Kazakhstan upon the demise of the USSR led to a sig-
nificant elevation in Kazakhstan’s international profile as well as a consid-
erable infusion of foreign aid from the United States. During a period of
unusual political pressure Russia attempted to enlist international opinion
against Kazakhstan as well as the new republics (especially the Baltic states,
which were said to be discriminating against the Russians left there).
Nonetheless, Kazakhstan refused to permit the introduction of dual citi-
zenship for ethnic Russians.
It must be asked, however, what further recourse Kazakhstan might have
had, if Russia had wished to push any of these issues harder than it did. At
its birth the republic had virtually no military capacity, inheriting a piece of
the Soviet army that was ill suited to the country’s needs. In the early days
of the republic, it was even assumed that Kazakhstan would not need any-
thing other than a small national guard, whose duties would be primarily
ceremonial since any true security needs would be met through combined
CIS forces. It was presumed these would essentially be a continuation of the
Soviet army. When it became clear that Russia intended to concentrate its
resources on the creation of a Russian army, assuming control of all the
troops on Russian territory, Kazakhstan was forced to follow suit, creating
at least the formal basis for Kazakhstan’s military.
The Kazakhs recognize that their defensive capacity will always be a lim-
ited one. Their tendency has been to reduce the size of the armed forces but
increase their specialization. This decision was made partly because of costs
and partly because since its birth the Kazakh army has been plagued with
problems. Since most of the Soviet officer corps was Slavic, the national-
Martha Brill Olcott | 233

ization of the army caused an immediate and massive hemorrhage of per-
sonnel since more than two-thirds of the company and battalion comman-
ders left for other republics.14 Kazakhstan had virtually no native officers
with whom to replace them, leaving the armed forces staffed at 50 percent
of readiness levels or less.15 The preparedness and reliability of those who
remained were uncertain at best. When Kazakhstan was able, after long
political delays, to send a token number of troops to serve in the joint CIS
forces in Tajikistan, Kazakh soldiers reportedly raped and robbed the vil-
lagers they were meant to protect.16 Corruption and malfeasance in the
higher echelons of the military remain a perennial problem.
Formal statements of national security doctrines may pose more com-
prehensive goals, including the lessening of the country’s dependence on the
Russian military, especially its air defense. For now, however, Kazakhstan
must hope that Russia’s understanding of its security needs coincides with
Kazakhstan’s own. Similarly, Kazakhstan’s armed forces are slowly being
completely reorganized. They now number sixty-five thousand people with
the army numbering under fifty thousand and the air force nearly twenty
thousand.17 While Kazakhstan’s military gets some training from NATO
nations, most of its equipment still comes from Russia, partly paid for in
cash and partly in exchange for debt forgiveness.
Russia’s military superiority, coupled with its ability to cripple
Kazakhstan’s economy, explains why Nazarbayev worked harder than any-
one else to keep the USSR alive. He then worked hard to make a reality the
various postcollapse bodies such as the CIS, common ruble zone spaces, the
Euro-Asian Union, and the five-nation customs union. The Kazakhs have
been strong advocates of Putin’s effort to redefine the customs union as a
Eurasian economic community. This stance is unlikely to change should
there be a transfer of power in Kazakhstan.
In fact, players in a succession struggle might promise closer ties to
Russia than currently exist through deeper forms of integration, making
Russia the kind of de facto ruler of the constituent states that the Soviet
Union was for the nominally independent states of the old Warsaw Pact. Yet
any major change in the current juridical relation between the two coun-
tries seems highly improbable. Russia is eager to limit the costs of its mil-
itary engagements and refuses additional social responsibility. The Kazakhs
would more likely trade economic concessions for protection than give
away formal sovereignty, which would put the ruling elite’s personal hold-
ings at greater risk.
234 | Can Kazakhstan Regain Its Promise?

Kazakhstan’s other neighbors will certainly be interested in the outcome
of any future transfer of power. Most interested of all could be China, as a
strongly nationalist leader in Kazakhstan could have an impact on China’s
internal security and might lead to a further deterioration of control in Xin-
jiang and western China. Still, there are no major political figures currently
active in Kazakhstan’s political scene who seem apt to upset the current
state of Kazakh-Chinese relations, and it is hard to envision China playing
an active role in an upcoming succession struggle. Any future Kazakh gov-
ernment will strive to remain on good terms with China. The Shanghai
Cooperation Organization, formed as the Shanghai Five in April 1996 and
renamed when Uzbekistan joined it in June 2001, has been a successful con-
fidence-building effort. Eventually, this organization could serve as a vehi-
cle for enhancing China’s role in resolving regional security problems. Today,
though, Russia remains Kazakhstan’s most important security partner, and
while China is sure to play a growing role in Kazakhstan, the pace with
which this will occur is uncertain. For now Beijing seems content simply to
mark its place at the table of great powers to which the Kazakhs recognize
a sense of obligation.
If Russia were to grow so weak that China would regard that influence
as withdrawn, it seems inevitable that China would move to replace Russia.
It might do this militarily or by economic means, which would be deter-
mined by the nature of the vacuum China perceived to exist. The nearness
of China also places an upper limit on how much Kazakhstan might pros-
per as an independent state, especially as it grows more self-consciously eth-
nic Kazakh. The Han who rule China have no interest in letting their
millions of Turkic Muslims in what is historically Eastern Turkestan live
alongside a strong independent state of other Turkic Muslims.
For now and for the foreseeable future, talk of Chinese expansion into
Kazakhstan seems remote. In fact, the territorial integrity of Kazakhstan
seems more ensured than that of any state in Central Asia or in the former
Soviet Union more generally. Kazakhs have always feared the prospect of
Uzbek expansion from the south, but the economic and political choices
made by Islam Karimov initially doomed Uzbekistan to be no more than a
neighborhood bully. Bullies like troubling their weakest not their strongest
neighbors, making Kyrgyzstan and Tajikistan far easier targets than larger
and more powerful Kazakhstan. The Uzbeks are likely to pay little attention
to any transfer of power in Kazakhstan since it is expected to have little con-
Martha Brill Olcott | 235

sequence for them. The southern border, however, could cause Kazakhstan
problems in the more distant future.
Historically, the Kazakhs arose from the Uzbeks, making the latter a sort
of senior people who might credibly assert a claim on the territories and
population of Kazakhstan’s south. More important, southern Kazakhstan is
ethnically the most Kazakh, the most densely populated, the least devel-
oped, the poorest, and the youngest part of the republic. This combination
of factors suggests fertile conditions for the spread of Islam, which the pres-
ent elite views as a tangible threat to stability.
Uzbekistan is a traditional rival of Kazakhstan, and over the past decade
the presidents of the two states have vied for preeminence in Central Asia.
Long-term U.S.-Uzbek military assistance would change the strategic bal-
ance in Central Asia to Kazakhstan’s detriment, and unless the growing U.S.
presence is coupled with a successful effort at economic reform it will do lit-
tle to increase the inherent stability of the Uzbek regime.
The Kazakh leadership is concerned about the political situation in
Uzbekistan. There is an active tradition in Uzbekistan of fundamentalist
Islam that threatens to change the nature of the Uzbek state and—failing
that—the present political incumbent. Either way, Uzbekistan will continue
to be a source of religious contagion for the Kazakhs. A deteriorating polit-
ical situation could complicate the process of succession in Kazakhstan,
adding to the atomization of the distant regions of the country. It also has
the potential to drive Kazakhstan to closer security cooperation with Rus-
sia. Kazakhstan is thus likely to face a growing differentiation between its
more secular, richer north and its poorer, more religious south. If the
Kazakhs of the south were to become convinced that their leaders in Astana
were both venal and godless, the political culture of Kazakhstan could
become even more fractured.

Kazakhstan after Nazarbayev

It is hard to know when Kazakhstan will begin its succession frenzy. The
Nazarbayev regime would like to concentrate its efforts on economic reform
and draw attention away from its stagnating political system. Thus, the
most likely scenario for the immediate future of Kazakhstan is continued
emphasis upon stability and with it a deemphasis on the electoral process.
236 | Can Kazakhstan Regain Its Promise?

Political systems are not static, however, no matter how much their lead-
ers may will them to be. President Nazarbayev may have the health and
longevity that those closest to him wish and be around to govern his soci-
ety for the next decade or even two. In that time, however, with or without
Nazarbayev at the helm, Kazakhstan is certain to change, even if only in sub-
tle ways, as a result of the political decisions that are being made, or not
made, now. As with lever poles, the consequences of present actions and
conditions will become more pronounced the farther away we move, result-
ing in very different sorts of futures in accordance with how immediate
problems are resolved, both in Kazakhstan and elsewhere.
No Kazakh government will ever be able to take the preservation of the
country’s territorial integrity for granted. Kazakhstan will always be at risk
from the prospects of Russia’s fragmentation. If the Russian Federation were
ever to dissolve, parts of northern Kazakhstan might try to join with parts
of Russia, especially if Kazakhstan were experiencing a difficult succession
struggle at the time.
Survival would be more certain if Kazakhstan were to succeed in estab-
lishing a credible monopoly of force in the republic by creating a workable
military, making the police more reliable and less corrupt and reducing
sharply the power of the various criminal and quasi-criminal groups that
currently flourish. Assuming that the world continues its present trend
toward economic globalization, however, the single strongest determinant
of whether Kazakhstan is dismembered will probably be the attitude of the
world community to the fragmentation of existing states. As may be seen in
the international reaction to the events in Zaire (now the Democratic Repub-
lic of the Congo) and elsewhere in Africa over the past decade, the global
economy’s primary interest in states that are the producers of raw materials
is continued access on reasonable terms. This is a goal that the proliferation
of subauthorities makes more difficult. It thus seems most likely that there
will be strong international pressure to resist any further redrawing of state
boundaries in Central Asia and elsewhere.
In the years since the collapse of the Soviet Union the international com-
munity has taken little interest in the political conditions within existing
states as long as the diamonds, chrome, oil, and other commodities pro-
duced by such states continue to reach the world’s markets. If states want
to become more democratic, the United States in particular is willing to
devote resources to help them to do so, but no one seems willing to risk
being cut off from a dependable source of raw materials in the service of a
Martha Brill Olcott | 237

political goal. That international indifference gives Kazakhstan wide latitude
in defining its future political nature. The option that would give the repub-
lic the greatest long-term stability would be the evolution and strengthen-
ing of some form of democracy. As noted above, the leadership of
Kazakhstan has been fearful of democratization in part because of the repub-
lic’s demography.
Making Kazakhstan more Kazakh is not, however, going to make the
republic less divided. If however, most of the country’s population felt an
interest in the continued existence of the state, if others believed that they,
or members of their group, might move into positions of leadership, make
economic headway, or share in the future of the state in some way, such a
Kazakhstan, for all its current problems, would likely be able to continue to
depend on the loyalty of its citizens.
As noted earlier, the differences between old and young, rich and poor,
and urban and rural Kazakhs are growing, as are the differences between
northerners and southerners and between the secular and the religious.
The consequences of these processes are that Kazakhstan is going to con-
tinue to be a heterogeneous society, even if it manages to become ethnically
more uniform. The best way to ensure that the various constituencies of the
state have an interest in the continuation of the status quo is to broaden par-
ticipation in the processes of governance, regularizing elite replacement and
reducing the appeal of groups that advocate catastrophic change.
Unfortunately, a survey of the present environment makes the strength-
ening of democracy seem unlikely. Indeed, if Kazakhstan does not become
more democratic soon, it will be more difficult to do so in the distant future.
If the population acquiesces to President Nazarbayev’s transferring power to
a handpicked successor, the prospect that democratic reform will soon be
embraced seems remote. This is all the more true if the new president is a
member of the Nazarbayev family. In either case, Kazakhstan’s second pres-
ident will probably lack the same level of political legitimacy that Nazarbayev
has enjoyed and may lack his political skills, especially given the atmos-
phere of sycophancy that dominates Kazakhstan’s political environment.
Democratic development in Kazakhstan is linked in part to develop-
ments in Russia. A strong democracy next door would not by itself be
enough to convince the Kazakh elite to share political power, but an expand-
ing and prospering Russian middle class would almost certainly stimulate
the growth of a middle class in Kazakhstan as well. They in turn could push
for the election process to become more open, so that the various regions
238 | Can Kazakhstan Regain Its Promise?

and interests in the republic would get better and more responsive repre-
sentation. Only then will Kazakhstan begin to move away from govern-
ment by personalities, to government by institutions and laws. This scenario
would become considerably more probable if Kazakhstan were able to dis-
tance itself from the emerging ethnonational basis of political entitlement
and to move toward an understanding of citizenship that makes a positive
use of Kazakhstan’s multiple traditions and cultures.
The growth of a genuine democracy in Russia is no guarantee of a simi-
lar growth in Kazakhstan, but its absence is a detriment, at least for now.
Russia’s political influence on Kazakhstan, for better or worse, is apt to fade
with time. When there are fewer Russians living in the republic, Russian
opinion and Russian politics will be of less significance.
Realistically, it seems that in both Russia and Kazakhstan the same forces
may be at work, militating against democratization in either state. The temp-
tations and rewards of the enormous natural wealth in both countries make
political control far too valuable to entrust to a mere democracy. The prob-
lem that this presents—for Kazakhstan at least—is that its natural resources,
while vast, are nevertheless finite. If the profits from its oil and other
resources are reinvested in the republic to at least a limited extent, then it
is probable that the state will be able to continue to survive indefinitely in
some version of its present autocratic-oligarchic nature. The regularization
of tax structures, improved handling of the terms for and proceeds from
international investment, and a check on the greed of the elite would prob-
ably allow Kazakhstan to continue to perpetuate the present system, and
President Nazarbayev then might even be able to arrange his own succession.
Such a state would be characterized by relatively low levels of public edu-
cation and public health; a pronounced rural-urban imbalance with a few
cities becoming swollen magnets for the impoverished unemployed and
underemployed from the countryside; and great disparities in wealth, with
most of the country’s income held by 5–10 percent of the population.
On the other hand, if Kazakhstan manages to waste most of the proceeds
of its natural resources, as such states as Nigeria and the Congo have done,
then the long-term outlook for Kazakhstan becomes much dimmer. Clasp-
ing the spent wealth of the past to themselves and having no promise of
future wealth to hold out to the many poor, the elite would be forced to seek
the support of regional protectors, thus turning Kazakhstan into a vassal
state. Presuming that the United States would not make itself available to
play this role, the master of next choice would be Russia, but if Russia itself
Martha Brill Olcott | 239

is too weak or, less likely, has become too democratic, then Kazakhstan’s elite
would even feel pressed to seek the protection of China since the alterna-
tive would be the loss of its own position.
The people of Kazakhstan have exhibited extraordinary patience in
enduring the effects of simultaneous political and economic transforma-
tion. As noted, most Kazakhs see the quality of their lives as sharply dimin-
ished since the collapse of the Soviet Union, but they find hope in the
removal of the ideological encumbrances under which they once toiled.
While the local Russians have difficulty in defining their relation to the state
in which they now find themselves living, the Kazakhs at least can find a cer-
tain solace and consolation in their status as members of the international
community.
In addition to the challenges Kazakhstan still faces in nation building and
economic restructuring, the republic has a daunting list of environmental
repairs. The continued desiccation of the Aral Sea and the ecological con-
sequences that this brings have made large portions of Kyzylorda oblast
toxic, fatal to infants and dangerous to adults. The Caspian shore faces a
challenge of another sort (in addition to those posed by industrial pollution
from oil development). For reasons that no one can explain, the Caspian Sea
is rising, threatening to flood villages and many of the new oil wells on
which Kazakhstan is depending for future prosperity. Environmental pol-
lution is a huge problem in places like Karaganda, Pavlodar, and Semi-
palatinsk as well because of the legacy of Soviet-era industrial giants.
To its credit, the Kazakh leadership has made many efforts to grapple
with the problems it faces. Given no choice but to become independent,
Kazakhstan has attempted to create a framework for a market economy and
initially sought at least the trappings of a participatory democracy and a
society based on the rule of law.
Yet a variety of circumstances—some avoidable, some not—has dimin-
ished the Kazakh leadership’s commitment to these goals, while the con-
tinued deterioration of Kazakhstan’s quality of life is magnifying ever larger
the consequences of the leadership’s more venal, self-serving, and self-
interested actions. As I have suggested, the nature of what Kazakhstan will
be tomorrow is still open to definition. The state is blessed with huge nat-
ural resources, an educated population, and a civic fabric that, even if badly
frayed, is still strong. An intelligent and patriotic use of those blessings
would allow Kazakhstan to take a place as a vital member of the interna-
tional community. If, however, those blessings are misused and wasted,
240 | Can Kazakhstan Regain Its Promise?

then Kazakhstan could, unfortunately, taste the fate of several wealthy post-
colonial societies where the masses live in misery as the price for the inor-
dinate greed and stupidity of their rulers.

What Messages Should the United States Give the Kazakhs?

In a bipolar political environment, such as the one that predominated for
most of the last half century, incompetent and kleptocratic elites who
enjoyed little popular support were often able to find foreign patrons to help
them remain in power. This was particularly true of those who ran resource-
rich states.
It is harder to predict the longevity of such regimes in the new post–Cold
War international environment. Because of its dependence on raw materi-
als, the United States may continue to befriend resource-rich states with cor-
rupt and undemocratic regimes, but the pressures of globalization may
prove very unkind to such states. The need to become competitive or face
ouster from emboldened masses who reject their disenfranchisement could
force these rulers to sponsor economic and political reforms.
In a world in which people everywhere are becoming increasingly more
interconnected, the cost of systematically excluding large portions of the
population on the grounds of ethnicity, religion, or place of birth; the cost
of stunting the development of one part of the nation for fear that it may
eclipse the power of another part; and the cost of consigning the majority
of a nation’s citizens, especially its young citizens, to lives of poverty and
ignorance to enable a privileged few to live in luxury may be harder to facil-
itate over long periods of time.
The leadership in Kazakhstan is not immune to such pressures. As this
book went to press, challenges to Nazarbayev’s power were growing. Rifts
within the Kazakh ruling family were becoming public, and son-in-law
Rakhat Aliyev was dropped from his posts after public accusations of his
corruption. Several young reformers have left the government to lobby for
more rapid economic and political change.
Now is the time for the United States to press the Nazarbayev regime to
develop more participatory political institutions and to take seriously the
need for economic transparency. To do so would produce clear advantages
for Kazakhstan’s population and a more reliable strategic partner for Wash-
ington in the process.
Martha Brill Olcott | 241

There is little to lose from such a strategy. Pressure from the United States
will not push Kazakhstan into Russia’s arms, nor will it endanger Western
development of Kazakhstan’s energy resources. In fact, improvements in
the legal environment in Kazakhstan would provide new guarantees for
U.S. and other Western firms and make their position in Kazakhstan more
secure. Absent such changes, Western firms will always be subject to pres-
sure to redefine contracts or risk renationalization.
Over the past several years Nursultan Nazarbayev has proved an ever-
more competent manager of his relationships with both Russia and the
United States. For all the trials and tribulations of Nazarbayev’s relations
with Russian leaders who have periodically threatened and bullied him over
the past decade, the Kazakh leader has managed to carve out a relationship
with Moscow that well serves both parties. At the same time, he has lever-
aged the U.S. relationship to his advantage, making the United States appear
to be a guarantor of his sovereignty without actually getting it to offer any
formal guarantees, and he has done this without endorsing key principles of
U.S. foreign policy such as the isolation of Iran or the introduction of a
democratic system of rule.
The Kazakh manipulation of its oil card has often been masterful. The
publicity generated around the giant AgipKCO deposit has kept Kazakhstan
regularly in the news and left everyone guessing about the final export route
or routes, despite the fact that much of U.S. policy in Kazakhstan has been
driven by an interest in securing access to its oil reserves without depen-
dency on either Russia or Iran.
For all its vast reserves, however, Kazakhstan is not yet a major producer
of oil and may never become one if the price of oil drops too low to make
developing these landlocked offshore reserves profitable. Russia, right next
door, has much vaster reserves that would be easier to develop technically,
should their ownership finally be settled. Moreover, improved relations
between the United States and Russia could lead to a rethinking of pipeline
issues and the whole timing of Caspian development.
Western oil companies working in Kazakhstan will certainly be con-
cerned parties to any succession struggle that develops, but they are more
likely to have to accept an outcome than to determine the order in which
the players arrange themselves. The sanctity of their current contracts is
already being called into question by the same president who signed them;
in early 2001 the Nazarbayev government began to complain that some of
the tax arrangements to which it had agreed were not in the national
242 | Can Kazakhstan Regain Its Promise?

interest and should be redefined. A new president, especially one chosen
in a nondemocratic fashion, could make new demands on these Western
firms, hoping to produce funds for either the national treasury or his per-
sonal coffers.
Given its geographic isolation, Kazakhstan will also always be dependent
on the cooperation of neighboring countries to move its oil and gas to mar-
ket. For this reason, the United States’ interest in security cooperation in the
region has been a repeated theme. It took on new importance after the Sep-
tember 11, 2001, terrorist attacks in New York and Washington, when the
United States was able to transform the previous limited level of military
cooperation to a much expanded U.S. military presence in Uzbekistan,
Tajikistan, and Kyrgyzstan. But the newly opened bases are intended to
help Washington meet U.S. strategic needs, not to address the security
demands of the states themselves.
Further, the discovery that the nations of Central Asia can serve as strate-
gic assets for the United States could compound the difficulty in defining a
winning formula for engaging in the transition economies of the post-Soviet
states. For the past decade, the United States has been sending these states,
including Kazakhstan, conflicting messages, without making any one mes-
sage a real priority.
Washington’s stated preference—and it is a strong and clear one—is that
the Central Asian states should remain independent and not become the
puppet states of any current or potential enemy of the United States. Cer-
tainly the West would like the Central Asian states to succeed, and U.S. for-
eign assistance to Kazakhstan and the other newly independent states has
focused on helping them to reform their economic, political, and social wel-
fare systems so they can become sustainable market-oriented democracies.18
Yet the resources devoted to this have been truly limited, only about $50
million a year in the case of Kazakhstan, which had been getting more
money than any of its other Central Asian neighbors. Given the monu-
mental nature of the tasks these countries face, this level of support could
hardly be considered to give the United States anything resembling a veto
power in their affairs. All it has qualified Washington to do is to nudge
them along in the direction that it wanted them to go.
In the wake of the bombings of September 11, U.S. spending in the
region may well increase, but it is unlikely to rise meteorically. It is also
unclear how much leverage the United States would have in Kazakhstan
even if it were to spend five, ten, or even twenty times the amount budgeted
Martha Brill Olcott | 243

in recent years. Moreover, given the earning power of its economy, the
Kazakh government will always be capable of refusing assistance if the
strings attached are not to its liking.
Kazakhstan’s geographic vulnerability, however, is quite another mat-
ter—one that both puts its economy at risk and creates an opportunity for
the United States to press the Kazakhs harder. As mentioned earlier, the
United States has little to lose in Kazakhstan. The Kazakhs need the global
energy leaders to invest in their country even more than the major energy
firms need Kazakhstan. The Russians do not have the technical expertise
necessary to exploit the deposits on their own, nor will the necessary tech-
nology be sold to them. So while Kazakhstan can play the Western firms off
against one another, in the end the United States should have continued
access to these reserves.
This means that Washington could have pressed Kazakh leaders to take
the commitment to democracy building more seriously from the beginning.
Had the United States adopted a more interventionist stance early on,
Kazakhstan might have developed a different kind of political system, but
this would have required the United States to spend more money and exert
more pressure. Had the United States increased its pressure at the time of
President Nazarbayev’s bad behavior in 1994 and 1995, when he began
reneging on his earlier willingness to engage in political reforms, Kazakhstan
might not have as corrupt a political system as it has today. It also might
have moved more rapidly toward economic reform. Some of the legislation
necessary for macroeconomic reform might have been put in place more
slowly, but this delay might have contributed to its ultimate effectiveness.
Instead, Kazakhstan has many good laws, but no one in authority particu-
larly interested in enforcing them. It also lacks an independent parliament,
an independent judiciary, and popularly accountable local governments.
U.S. leaders should press the Kazakhs toward the creation of these insti-
tutions and, wherever possible, should tie continued U.S. assistance, polit-
ical risk insurance, and loan guarantees to the requirement of transaction
transparency. U.S. policy makers should be prepared to do this even in the
energy sector, suffering no illusions that the Kazakhs will listen to them.
In the end, the argument for democracy building has to be grounded in
a belief that it is in the long-term interest of Kazakhstan and its people. As
a global leader, the United States must press the Kazakh leaders to take
seriously the responsibilities of governing. Kazakhstan may be turning into
a family-owned country, but it is an implicitly pluralistic society. Its ethnic
244 | Can Kazakhstan Regain Its Promise?

diversity, vast territory, varied economy, and well-educated population all
make it possible to sustain a democratic form of government if the country’s
leaders would allow one to develop.
The alternative is that the United States would engage itself in the coun-
try only as long as it views Kazakhstan’s oil as valuable. The life of most of
the production-sharing agreements that form the basis of Kazakhstan’s
energy developments is twenty years. After that, the United States and
American companies alike can walk away and simply leave the Kazakh peo-
ple to their own devices. If, however, the United States takes this attitude,
it can rest assured that the next generation of analysts will be writing about
who lost Kazakhstan and a number of other Caspian states, in much the
same way that many are now writing about Africa’s problems.
Appendices
Appendix 1
The Oblasts of Kazakhstan

Appendix 4
Political Parties and Parliamentary Elections in Kazakhstan

On March 7, 1994, elections were held for the unicameral legislature, the
Supreme Council, composed of 177 seats, 40 of which were to be filled by
candidates on a presidential list.

Table A4-1. Distribution of Seats Won as a Result of Elections *
Affiliation Seats
Union of People’s Unity (SNEK, propresidential) 39
Trade Union Federation 12
People’s Congress (NKK) 13
Socialist Party 14
Peasants Union 4
LAD Republican Movement 4
Other 10
Total 96
*Shows seats won in elections, not the composition of parliament.
Note: SNEK was a propresidential party, and received the support of the regime. The Trade Union
Federation was formerly the state-controlled trade union organization. The NKK is a soft oppo-
sition party led by Olzhas Suleimenov, which appealed equally to Russians and Kazakhs, most
of these being northerners. The Socialist Party and the Peasants Union are left-leaning parties
and for the most part ethnically Russian in membership. The LAD Republican Movement is an
ethnic Slavic opposition party.

On December 9, 1995, Parliamentary elections were held for a new bicam-
eral legislature, established by the new constitution of August 30, 1995. The
bicameral legislature was comprised of the Majilis, which had 67 seats, and
the Senate, which had 47 seats.
(See table on next page.)
252 | Appendices

A4-2. Distribution of Seats in the Majilis Won as a Result of Elections
Affiliation Seats
People’s Unity Party (PNEK, propresidential) 24
Democratic Party (propresidential) 12
Peasants Union 5
Trade Union Federation 5
Communist Party 2
Independents (other) 19
Total 67
Note: SNEK was renamed PNEK and continued to be compliant with the president. The Demo-
cratic Party was a propresidential party that was created before the election and received the
support of the regime. The Communist Party, legalized in 1993, was not permitted to compete
in 1994 elections but was reconstituted and participated in 1995 elections, led by Serikbolsyn
Abdildin.

On October 10, 1999, and October 24, 1999 elections were held for Majilis.
Under the new system 10 seats of the 77-seat Majilis were elected from
party lists, on the basis of proportional representation and the remaining 67
were elected in single-mandate constituencies.

Table A4-3. Distribution of Seats Won as a Result of Elections
Affiliation Seats
Otan (propresidential) 24
Civil Party 11
Communist Party 3
Agrarian Party 3
Republican People’s Party (RNPK) 1
People’s Cooperative Party 1
Business 10
Independents (government associated) 20
Independents (other) 4
Total 77
Note: Otan is a propresidential party formed when the People’s Unity Party (PNEK) and the
Democratic Party, along with several other smaller propresidential parties and movements,
merged after supporting Nursultan Nazarbayev’s candidacy for president in 1999. The party is
led by former Prime Minister Sergei Tereshchenko. The Civil Party, led by Azat Peruashev,
cooperates with the regime and seeks to increase the welfare of Kazakhstan’s citizens and pro-
tect domestic producers. The Agrarian Party, headed by Romin Madinov, seeks the introduc-
tion of private ownership of land, improvement of agricultural infrastructure, and changes in the
taxation of the agrarian sector. The RNPK is an opposition party headed by exiled former Prime
Minister Akezhan Kazhegeldin. The People’s Cooperative Party, led by the chairman of
Kazakhstan’s Consumer Union, Umirzak Sarsenov, is a left-leaning party supporting agricultural
producers and promoting a socially oriented economy.
Appendix 5
Gross Domestic Product of Kazakhstan, 1991–2000

lion requested for FY2001
Overseas Private Investment Provides equity financing to small- and medium-sized private-sector enterprises
Corporation (OPIC): AIG Silk and joint ventures operating in Central Asia Target size of $100 million, jointly funded
Road Fund with European Bank for Reconstruction
and Development (EBRD). OPIC pro-
vides loans, loan guarantees, and
investment insurance for the funds it
supports.
OPIC: New Century Fund Invests in diversified manufacturing, consumer products, and financial and service $250 million fully invested
industries in the newly independent states, including Kazakhstan
Central and Eastern Invests in light manufacturing and projects to develop office, warehousing, and the Up to $240 million invested
Europe–Newly Independent distribution of property in Central Europe and the newly independent states,
States (NIS) Property Fund including Kazakhstan
OPIC: First NIS Regional Fund Seeks equity investments in companies involved with natural resources, telecom- $200 million invested
munications, light manufacturing, and consumer products in the NIS, including
Kazakhstan
OPIC: Agribusiness Partners Invests in agriculture, food production companies, infrastructure projects, food $95 million fully invested
International Fund storage, and distribution facilities in the NIS, including Kazakhstan
OPIC: Russian Partners Fund Invests in companies involved with natural resources, telecommunications, light $155 million fully invested
manufacturing, and consumer products in the NIS, including Kazakhstan
Central Asian–American Enter- Promotes the development of emerging private sectors in Central Asia. Managed by Capitalized by the U.S. government at
prise Fund a private board of directors, the fund makes debt and equity investments and $150 million for 2000–2004
offers technical assistance, focusing on projects in infrastructural sectors
Global Partner Ventures (formerly Venture capital fund focusing on converting the human and technological potential Received more than $50 million from the
the Defense Enterprise Fund) of the former Soviet Union’s military industry. Invests in joint ventures between U.S. Defense Department, and $20 mil-
Soviet military plants and Western partners in Kazakhstan, as well as in Russia, lion from the U.S. State Department
Ukraine, and Belarus
Nunn-Lugar Cooperative Threat Aided in the removal of all Soviet strategic nuclear weapons from Kazakhstan. In Inaugurated in 1991, the program cost
Reduction Program November 1994, funded Project Sapphire, a project to airlift nuclear materials less than $3 billion over seven years.
from Kazakhstan
United States Trade and Develop- Funded feasibility studies for U.S. firms in Kazakhstan for coal mine development, $3.9 million for nine feasibility studies
ment Agency (TDA) bank automation, gold mine development, gas pipelines, dairy modernization,
customs automation, and oil field development
Export-Import Bank of the United Grants short- and medium-term credit insurance, medium- and long-term loan guar- Not available
States antees, and direct loans to U.S. firms trading in Kazakhstan
U.S. Military Assistance Provides military education and training programs, as well as foreign military financ- $8.6 million from 1993 through 2000
ing. Also includes U.S. support for NATO’s Partnership for Peace Program
International Monetary Fund Promotes structural reforms through loan packages for Kazakhstan’s government $538.3 million provided in loans since 1993
World Bank Promotes development through five adjustment operations, three technical assis- $1.82 billion approved for 21 projects
tance loans, and thirteen investment loans, including loans for agricultural priva-
tization, road transport improvement, health and legal reform, water and sanitation
projects, and energy-sector reform
European Union: Tacis Program Finances technical assistance and investment projects, including the development of €111.9 million since 1991
an east-west transport corridor from Central Asia to Europe
European Bank for Reconstruc- Provides assistance through loans to encourage financial reform, the privatization of €587.4 million in signed projects since
tion and Development (EBRD) industry, and investment in natural resources, oil, and gas 1993
Asian Development Bank (ADB) Encourages transition to a market-based economy by providing loans to support $525 million provided in loans since
government reform, infrastructure development, education and training, industry, 1993
agriculture, and private-sector development
Appendices | 257
258 | Appendices

*OKIOC was formed in 1993; in September 1998, Kazakhstan sold its share of the consortium to Philips Petroleum, based in the United States, and Inpex of Japan.
Kazakhstan will continue to profit from the consortium, however, through taxes, royalties, and bonuses. In the summer of 2001, after Italy’s ENI Agip became sole oper-
ator, OKIOC was renamed AgipKCO.
Appendix 11
Social Statistics for Kazakhstan, 1991–1999

Bank account at Swiss branch of $80 million Account belongs to Nursultan Nazarbayev, according to
Credit Agricole-Indosuez authorities in Geneva.
Bank account in Swiss Pictet et Unknown Account allegedly belongs to Nursultan Nazarbayev
Cie Bank
BN Munai Joint venture with U.K.-based Atlantic Caspian to develop the Akkul Thirty percent of the shares belong to BN Consultancy,
oil field owned by Bulat Nazarbayev (brother of the president).
"Bobek" Children’s Fund Created to provide assistance to children; allegedly collects money Sara Alpysovna Nazarbayeva heads the fund.
from akims and businesses on a regular basis
Eurasia Travel Company Services and pays for Nazarbayev’s family vacations in expensive Alleged to be closely connected with Nursultan Nazarbayev
resorts around the world
Europe Plus Kazakhstan Radio station Founded by Rakhat Aliyev
Hyatt Rakhat Palace Hotel Luxury hotel in Almaty Allegedly linked to Rakhat Aliyev’s group
Informika Media Holding Includes television channel KTK (Commercial Television of Allegedly controlled by Rakhat Aliyev
Kazakhstan), the Karavan newspaper, and Franklin Publishing
House
International Fund for the Registered in 1995, the fund opened account 35877 with United Over- Timur Kulibayev was appointed secretary of the fund;
Development of Kazakhstan seas Bank in Geneva; allegedly, up to $19 million was transferred Nursultan Nazarbayev was allegedly given the right to
(Kazakhstan Fund) through the account annually. make all transactions and transfer money from the fund
to a personal account.
KazAgroFinance Agriculture equipment leasing company State-owned, allegedly controlled by Timur Kulibayev’s
group
Kazakh Academy of Physical Joint stock company Thirty-eight percent of the shares owned by Sara
Training, Sports, and Tourism Alpysovna Nazarbayeva
Kazakhoil Major oil company operating in Kazakhstan Allegedly controlled by Timur Kulibayev’s group
Kazakhstan Temir Zholy Kazakhstan’s railway system Allegedly controlled by Timur Kulibayev’s group
Kazatomprom National Atomic Company Allegedly controlled by Rakhat Aliyev since it falls under
the auspices of national security; Aliyev heads the KNB
(National Security Committee)
Kazkommertsbank Kazakhstan’s largest bank; includes subsidiaries Kazkommerts-Policy, Allegedly controlled by Timur Kulibayev’s group
Kazkommerts securities brokerage, Unified Payment System, and
two financial companies registered in the Netherlands, Kazkom-
merts Inter-national B. V. and Kazkommerts Capital-2 B. V.
Kazphosphor Phosphorus company Allegedly controlled by Timur Kulibayev’s group
KazTransOil Oil company Allegedly controlled by Timur Kulibayev’s group; Kulibayev
is the president.
KEGOC: Kazakhstan Electricity Electrical grid manager for Kazakhstan Government stock company; allegedly controlled by Timur
Grid Operating Company Kulibayev’s group
Khabar Information Agency Includes television channel, radio station, and several newspapers Headed by Dariga Nazarbayeva
and magazines
Korinth Trade and Investment An investment group that acquired a controlling interest in Nelson Allegedly controlled by Timur Kulibayev’s group
Appendices | 265

Nazarbayeva’s group
Nelson Gold Canadian-based firm that controls 50 percent of the development of Allegedly controlled by Timur Kulibayev’s group
the Alibekmola and Kozhasai oil fields (the combined proved
reserves of the two fields are 264 million barrels); 70 percent of
ownership held by Kazkommertsbank
Novoe pokolenie Newspaper Allegedly owned by Rakhat Aliyev
NSBK Group Includes Narodny Bank, Kazakhstan’s Eximbank, and KazakhInStrakh Allegedly controlled by Timur Kulibayev’s group
(an insurance company)
Nurbank Bank active in Kazakhstan Founded by Dariga Nazarbayeva, Nurbank is allegedly used
for serving the businesses controlled by her and Rakhat
Aliyev.
Orel and Berkut Offshore companies Used to make transactions with oil money, these compa-
nies allegedly belong to Nursultan Nazarbayev and
James Giffen
Panorama Newspaper Allegedly owned by Rakhat Aliyev and Dariga Nazarbayeva
Pavlodar Oil Refinery Oil refinery Allegedly partly controlled by Timur Kulibayev’s group
Radio "NS" Almaty radio station Allegedly owned by Timur Kulibayev
Rakhat Group A group of 28 companies involved in the oil and gas industry, trade Allegedly linked to Rakhat Aliyev
in metals, mining, construction, telecommunications, media, and
hotel management; the group also finances the Almaty-based
"Rakhat" volleyball and water polo teams (formerly called Dinamo)
Real estate abroad Property worth tens of millions of dollars, including: a villa in Saint- Allegedly purchased by the Nazarbayev family
Tropez, France, a villa on the Turkish coast of the Mediterranean, a
house in the French Alps, and a nineteenth-century residence in
downtown London
Sakharny Tsentr (Sugar Center) Kazakhstan’s major sugar company Founded and headed by Rakhat Aliyev
Shymkentneftetorgsyntez Private oil company Allegedly controlled by Timur Kulibayev’s group through
(ShNOS) Kazkommertsbank
TransNefteGaz Holding company Newly created national oil and gas monopoly headed by
Timur Kulibayev

The complete publication information for any source appearing here in shortened
form may be found in the bibliography or at first mention in these notes.

Chapter 1
Introducing Kazakhstan

1. Chinua Achebe, The Trouble with Nigeria (London: Heinemann, 1983), p.1.
2. See Olcott, The Kazakhs; and Martha Brill Olcott, Central Asia’s New States (Washington,
D.C.: United States Institute of Peace, 1996).
3. Wood MacKenzie, quoted in Jaffe, Unlocking the Assets, table 3.
4. Quoted in George Lenczowski, “The Arc of Crisis: Its Central Sector,” Foreign Affairs, vol.
57, no. 4 (spring 1979), p. 796.
5. Samuel Huntington, The Clash of Civilizations and the Remaking of the World Order (New
York: Simon and Schuster, 1996).
6. The Commonwealth of Independent States (CIS) was formed by Belarus, Russia, and
Ukraine on December 8, 1991, and membership was extended to the remaining former Soviet
republics on December 21, 1991. Eventually all of the former Soviet republics, except Latvia,
Lithuania, and Estonia, joined the CIS.
7. Strobe Talbott, American Policy in the Caucasus and Central Asia, address to the Central
Asia Institute, Johns Hopkins School of Advanced International Studies, July 21, 1997.
8. In his press conference of December 8, 1999, President Clinton stated: “We got the
Caspian pipeline agreements, which I believe 30 years from now you’ll look back on and say
that was one of the most important things that happened this year.” Source: RFE/RL Newsline,
vol. 3, no. 238, part 1 (December 9, 1999).
9. It is becoming more accepted with time for the English language press to use the word
Kazakh to refer to all those who live in Kazakhstan, regardless of their ethnic origin.
10. For a more detailed discussion of Kazakhstan’s economy at the time of independence
see Martha Brill Olcott’s chapter on Kazakhstan in Kazakhstan, Kyrgyzstan, Tajikistan,
Turkmenistan, and Uzbekistan: Country Studies (Area Handbook Series), ed. Glenn E. Curtis

269
270 | Notes to pages 10–23

(Washington, D.C.: Library of Congress Federal Research Division, 1997). See also Boris Z.
Rumer, ed., Central Asia in Transition: Dilemmas of Political and Economic Development (New York:
M.E. Sharpe, 1996); and Richard Pomfret, Economies of Central Asia (Princeton, N.J.: Prince-
ton University Press, 1995).
11. According to Kazakhstan’s first census, in 1999 there were 14,953,000 people living in
Kazakhstan, down from 16,199,100 in 1989. For complete demographic information, see
appendices 1 and 2.
12. A claim made at a news conference held by Foreign Minister Yerlan Idrissov in Astana
on May 8, 2001, as reported by the Interfax news agency on that same date.
13. In 1989, 40.1 percent of Kazakhstan’s population were ethnic Kazakhs, and 37.4 per-
cent ethnic Russians; in 1999, 53.4 percent were ethnic Kazakhs, and 30.0 percent ethnic Rus-
sians. For more detailed information, see appendix 2.
14. The present-day city of Almaty and the oblast of the same name were known as Alma
Ata during the Soviet period. The oblast, or province, is a territorial and administrative unit
used in Russia and Kazakhstan. Contemporary Kazakhstan is composed of fourteen oblasts and
two urban administrative areas, Astana and Almaty.
15. This figure is based on projections through 1999. See Victor Shelgunov’s analysis in
“The Flight from the Oasis: Economic Crisis and the Migration Level,” Central Asian Bulletin,
December 6, 1998, no. 15. See appendices 1 and 2 for more demographic information.
16. This phrase was dropped from the 1995 constitution.
17. Known as Kiev until the end of the Soviet period, Ukraine’s capital city is now known
as Kyiv. The Soviet-era name is retained here for historical correctness.
18. Nazarbayev, Bez pravykh, p. 26.
19. The phrases glasnost (opening) and perestroika (reconstruction) became the watch-
words of reform after Mikhail Gorbachev came to power in 1985.
20. The Soviet Union was effectively dissolved when the leaders of the Belarusan SSR,
Ukrainian SSR, and Russian Federation (RSFSR) met outside Minsk on December 8, 1991, and
declared the 1922 Treaty of Union that had created the Soviet Union to be null and void.
21. “We the People” are the first three words of the preamble of the U.S. Constitution.
22. The 1995 constitution preserves Russian as an official “language of international com-
munication.” Kazakh remains the sole “state language.”
23. See appendix 6 for Kazakhstan’s trade statistics.
24. An expanded version of the Shanghai Five, which originally included Russia, China,
Kazakhstan, Tajikistan, and Kyrgyzstan, was created in April 1996. Uzbekistan joined the
newly named Shanghai Cooperation Organization in June 2001.
25. In July 1994.
26. Interfax, August 29, 1995, as quoted in FBIS–SOV–95–168, August 30, 1995, p. 65.
27. Kazakhs turned on local Russian settlers and officials after learning that “the natives”
would be forced to serve in labor brigades at the front. For more on the 1916 Kazakh upris-
ing, see Olcott, The Kazakhs, pp. 118–126.
Notes to pages 26–28 | 271

Chapter 2
Reluctantly Accepting Independence

1. Olcott, “Kazakhstan: Pushing for Eurasia,” p. 556.
2. U.S. Information Agency (USIA) polls in October and November 1997 showed his
approval rating at 65 percent (Opinion Analysis, USIA Office of Research and Media Reaction,
October 16, 1997, November 17, 1997.)
3. The Giller Institute Poll in July 1997 showed that 33.4 percent of the population sup-
ported his economic policies. Reported in Interfax, July 27, 1997, as translated in BBC Sum-
mary of World Broadcasts.
4. Even before the collapse of the Soviet Union gave Moldova its independence, local offi-
cials in Transdniesteria declared this region an independent Soviet Socialist Republic and
began to set up a separate republic government. After Moldova’s independence, the separatist
movement in Transdniesteria continued to grow stronger, and it received vast support from
Moscow. Russia’s Fourteenth Army was stationed in the region, making a Moldovan military
victory impossible. There are several possible explanations for Russia’s disproportionate sup-
port for the Transdniesterian separatists vis-à-vis, for example, the Russians in northern
Kazakhstan. One possibility is that Moscow wished to retain a bargaining chip that it could use
to “encourage” a reluctant Moldova to join the CIS. Unlike Moldova, Kazakhstan was a strong
supporter of post-Soviet integration. Another factor was certainly the prominence of the
Moldovan issue in the Russian press, a condition that Russian nationalists were exploiting. The
plight of Russians in Kazakhstan did not receive this kind of media exposure and thus was not
such a point of contention between Russian nationalists and moderates. Crowther, “Moldova,”
pp. 316–49.
5. To be his “eyes and ears” during this period Nazarbayev sent Kanat Saudabayev, later
Kazakhstan’s ambassador to Turkey, the United Kingdom, and the United States, to be his per-
sonal representative in Moscow.
6. It has been repeatedly rumored that Nazarbayev was invited to attend the Minsk sum-
mit in December 1991 and declined.
7. For more biographical information on Nazarbayev, see Tolmachev, Lider; Shepel’ and
Kasymbekov, Pervyi Prezident Respubliki Kazakhstan; Zhigalov and Sultanov, Pervyi Prezident
Respubliki Kazakhstan. For Nazarbayev’s autobiographical works, see Nazarbayev, Nursultan
Nazarbayev: Adiletting aq zholy; Bez pravykh; V potoke istorii; and Piat’ let nezavisimosti.
8. The present-day city of Almaty and the oblast of the same name were known as Alma
Ata during the Soviet period. The oblast, or province, is a territorial and administrative unit
used in Russia and Kazakhstan. Contemporary Kazakhstan is composed of fourteen oblasts and
two urban administrative areas, Astana and Almaty.
9. For more on the reformers’ targeting of Kunayev, see Olcott, The Kazakhs, pp. 245–53.
10. Gennady Kolbin, an ethnic Russian, was appointed by Moscow to replace Kunayev as
first secretary of the Communist Party of Kazakhstan in December 1986. Nazarbayev took over
from him in June 1989.
11. For more on the 1986 Alma Ata Uprising, see first the documentary volume Alma Ata
1986 and Kozybaev’s Dekabr’ 1986. See also Literaturnaia gazeta, November 28, 1990, p. 11;
Kazakhstanskaia pravda, September 28, 1990, p. 1, and December 17, 1991, p. 2.
272 | Notes to pages 28–34

12. The protests of 1986 were reevaluated in 1989–1990 by a committee led by Mukhtar
Shakhanov; see “Zakliuchenie Komissii Prezidiuma Verkhovnogo Soveta KazSSR po okon-
chatel’noi otsenke dekabr’skikh sobytii 1986 goda v Alma-Ate i drugikh oblastiakh Kaza-
khstana,” Alma-Ata, 1991.
13. Sovetskaia Rossiia, October 19, 1989, as translated in FBIS Daily Report, SOV–89–107,
October 27, 1989.
14. Nazarbayev as quoted in Yuri Kulchik, “Central Asia after the Empire: Ethnic Groups,
Communities and Problems,” in Central Asia: Conflict, Resolution, and Change, Roald Z. Sagdeev
and Susan Eisenhower, eds. (Washington, D.C.: Center for Political and Strategic Studies,
1995).
15. See Nazarbayev’s speech to Seventeenth Congress of the Kazakhstan Communist Party
in Kazakhstanskaia pravda, June 8, 1990, pp. 2–4.
16. One such group was the Kazakh language society called the Kazakh tili. Founded in the
late 1980s, its purpose was to advance the role of the Kazakh language in public life.
17. Russian speakers were particularly concerned about a clause in the draft language law
that would require some professionals and officials to know two or three languages, as well as
a clause mandating which languages must be offered in schools (Itar–Tass, September 22,
1989).
18. The Kazakh nationalist party called Azat (freedom) dates from this period. It was
founded in 1990 and advocated more autonomy for Kazakhstan within the Soviet Union. It
called for Kazakhstan’s sovereignty and the possibility of its secession from the USSR and for
the creation of local military groups (Brown, “New Political Parties in Kazakhstan”).
19. An example of late Soviet power-sharing arrangements with the republics was a pro-
gram put forward in March 1989 giving the republics limited control over their own budgets.
Most major industries, however, remained in the hands of the center. Bohdan Nahaylo, “Why
the Empire’s Subjects Are Restless,” Index on Censorship, vol. 18, no. 5 (May/June 1989), p. 27.
20. Azat joined with the Republican Party of Kazakhstan and the Kazakh nationalist Zhel-
toksan Party in 1992, but the group soon broke up. It is led by Chairman Kozha Akhmet
Khasen. Alash is a Kazakh nationalist party that also has an Islamist tinge. Its current leader is
Sovetkazy Akatayev. See “Major Political Parties and Public Associations in the Republic of
Kazakhstan,” on the Official Kazakhstan Internet web site: <www.president.kz/main/msain-
frame.asp?lng=en>.
21. Olzhas Suleimenov said this in an interview with Sovershenno sekretno (no. 9, 1990,
pp. 22–23).
22. Since 1989 Armenia and Azerbaijan have clashed over Azerbaijan’s ethnic Armenian
enclave of Nagorno-Karabakh. After several years of fighting, Armenia now controls a portion
of the secessionist territory, and the region’s final status is still undetermined. Georgia’s Abkhazia
region has been trying to win its independence through violent struggle since 1989. The region
now enjoys de facto independence, but tensions remain high.
23. The Treaty on the Union of Sovereign States that came out of the Novo-Ogarevo meet-
ing sought to remake the Soviet Union to fit the realities of 1990. It proposed a union in
which the sovereignty of the constituent republics would be guaranteed, as would their rights
to “decide independently all issues of their development.” The treaty spelled out which pow-
ers would belong to the Union and which would be jointly exercised by the union and its con-
Notes to pages 34–44 | 273

stituent republics. It also set out the procedures for the implementation of those powers (draft
of Novo-Ogarevo Agreement, published in Pravda, June 27, 1991, p. 2).
24. The term nomenklatura refers to managers, enterprise owners, bureaucrats, advisers to
the president, and others who constitute the traditional communist elite.
25. For a discussion on the sovereignty debate, see Olcott, The Kazakhs, pp. 264–68.
26. Nazarbayev played the role of power broker at this meeting, offering a new version of
the union treaty that would have been signed had the coup not taken place.
27. Vladimir Akimov, Itar–Tass, February 22, 1994. Suleimenov left the fray of Kazakhstan’s
political scene in 1995 when he accepted an appointment as Kazakhstan’s ambassador to Italy.
28. The highlights of Nazarbayev’s plan for the EAU were published in Izvestiya, June 8,
1994, p. 2, as translated in RusData DiaLine, Russian Press Digest. Additional information is
available in Itar–Tass, April 21, 1994.
29. Nursultan Nazarbayev, remarks at the Carnegie Endowment for International Peace,
April 23, 1999.
30. When Kozyrev began his stint as the foreign minister, he was known for his liberal, pro-
Western policies. By 1994, his rhetoric had undergone a significant shift, and he had joined
the voices advocating the protection of Russian speakers in the “near abroad” and insisting on
Russia’s right to assume a “special role” in countries of the former Soviet Union. See Kozyrev,
“The Lagging Partnership.”
31. Rossiiskaia gazeta, April 2, 1996, p. 3.
32. An acronym formed by the first letter of each member country: Georgia, Ukraine,
Azerbaijan, and Moldova.
33. For more information on the GUUAM group, see: Olcott, Åslund, and Garnett, Getting
It Wrong, pp. 66–70.
34. Ibid., pp. 26–27.
35. President Nazarbayev’s statement at a news conference in October 2000 during Putin’s
official visit to Kazakhstan. See “Agreements Signed with One of Russia’s ‘Closest Partners,’ ”
BBC Monitoring, October 9, 2000.
36. For example, Syzdyk Abishev, who was appointed the minister of External Economic
Relations of the Republic of Kazakhstan in 1991.
37. USIA Opinion Research, 1993, found that 29 percent of the population “completely
agreed” with this statement, and 32 percent “agreed more than they disagreed” with the state-
ment. By nationality the breakdowns were as follows: Kazakhs (18 percent, 35 percent), Rus-
sians (39 percent, 34 percent), and others (32 percent, 24 percent).
38. The United States’ Nunn-Lugar Cooperative Threat Reduction Program oversaw the
denuclearization of Kazakhstan, including the 1994 airlift of weapon-grade uranium to the
United States, dubbed Operation Sapphire.
39. The 1994 agreement provided for the joint training of Russian and Kazakhstani bor-
der guards and for a joint council composed of the heads of the two countries’ border services.
The 1995 document set up joint Russian-Kazakh border forces and allowed for a small Russ-
ian border detachment to be deployed in Kazakhstan, but Kazakhstan retains the sole right to
defend its borders.
40. Nazarbayev and Yeltsin signed the treaty, called the Declaration on Eternal Friendship
and Alliance Oriented to the Twenty-first Century, on July 6, 1998. For a comprehensive
274 | Notes to pages 45–56

discussion of Russian-Kazakh defense relations, see Alexandrov, “Military Relations between
Russia and Kazakhstan,” pp. 18–25.
41. “Russia Strengthening Its Relationship with Kazakhstan.” Nezavisimaia gazeta, Febru-
ary 15, 2000, p. 2.
42. Tom Dalyell, “Keeping the Nasties under Lock and Key,” New Scientist, February 4,
1995, p. 47.
43. CENTRASBAT was formed in 1995 under UN auspices. Since then, it has participated
in two major multinational military exercises organized by NATO’s Partnership for Peace pro-
gram. These exercises have taken place in all three CENTRASBAT countries and have included
troops from the United States and other countries in the region. Most recently, military per-
sonnel from Kazakhstan and the United States participated in Exercise “Zhardem ’99,” a month-
long practice exercise in providing aid during natural disasters.
44. In 2001, Russia will provide Kazakhstan with twenty million dollars’ worth of arms and
military hardware. See “Russia to Export to Kazakhstan 20m-Dollars’ Worth of Arms,” BBC
Monitoring, January 12, 2001.
45. Nazarbayev in an interview in November 2000. See “Kazakh President Upbeat on
Eurasian Economic Community’s Future,” BBC Monitoring, November 15, 2000.
46. International Monetary Fund, Direction of Trade Statistics Yearbook (Washington, D.C.:
IMF, 1998).
47. International Monetary Fund, Kazakhstan: Recent Economic Developments, Staff Coun-
try Report, no. 96/22 (Washington, D.C.: IMF, March 1996), p. 106.
48. In June 2000, Putin approved a new foreign policy concept for Russia. The document
emphasizes the importance of further developing relations and maintaining “strategic part-
nerships” with Russia’s neighbors.

Chapter 3
The Challenge of Creating Kazakhstanis

1. These include Alash, which is named after the mythic founder of the Kazakh party and
traces its roots to the nationalist movements founded in 1990, and Azat. Both of these groups
support special rights for Kazakhs.
2. For a study of the nature of boundaries in Central Asia, see A. Malashenko and M. B.
Olcott, eds. Mnogomernye granitsy Tsentral’noi Azii (Moscow: Carnegie Moscow Center, 2000).
3. “Kak nam obustroit Rossiu,” Komsomolskaia pravda, September 19, 1990, and Aleksandr
Solzhenitsyn Publitsistika (Yaroslavl: Verhne-Volzhskoe knizhnoe izdatelstvo, 1995), vol. 1,
pp. 540–41, 543.
4. See, for example, Nazarbayev’s interview with Manfred Quiring, “Now He Is Keeping His
Distance from Moscow,” Berliner Zeitung, February 11, 1994, as translated in FBIS Daily Report,
SOV–94–030, February 14, 1994. He did sign two agreements with Moscow in January 1995,
which, respectively, defined the treatment of citizens of one state permanently residing in the
other.
5. See Martha Brill Olcott, Central Asia’s New States (Washington, D.C.: United States Insti-
tute of Peace Press, 1996), pp. 62–70.
Notes to pages 56–67 | 275

6. Conference on Security and Cooperation in Europe, “Recommendations to the Govern-
ment of Kazakhstan,” letter of Max van der Stoel, the Commission for Security and Coopera-
tion in Europe (CSCE) High Commissioner on National Minorities, The Hague, April 29,
1994.
7. Turkmenistan and Russia signed a dual citizenship agreement in December 1993, at
which time Boris Yeltsin very symbolically accepted Turkmen citizenship.
8. The “Treaty between the Kazakhstan Republic and Russian Federation on the Legal Sta-
tus of Citizens of the Kazakhstan Republic Permanently Residing in the Russian Federation and
Citizens of the Russian Federation Permanently Residing in the Kazakhstan Republic,” printed
in Kazakhstanskaia pravda (January 21, 1995), as translated in FBIS Daily Report, SOV–95–019
(January 30, 1995), made it easier for such permanent residents to become citizens of the state
in which they lived (“Agreement between the Republic of Kazakhstan and the Russian Feder-
ation on Simplification of the Procedure for Obtaining Citizenship by Citizens of the Repub-
lic of Kazakhstan Arriving for Permanent Residence in the Russian Federation and Citizens of
the Russian Federation Arriving for Permanent Residence in the Republic of Kazakhstan”),
Kazakhstanskaia pravda, January 21, 1995, as translated in FBIS Daily Report, SOV–95–017,
January 26, 1995.
9. A. G. Vishnevskii, Naselenie Rossii 1995, p. 82, quoted in Olcott, “Demographic
Upheavals,” p. 542.
10. Ethnic Russians appointed to the Kazakh government between 1994 and 1996
included: Vladimir Karmakov, minister of energy and the coal industry (appointed June 14,
1994); Vyacheslav Kostuychenko, minister of industry and trade (appointed June 17, 1994);
Vladimir Skolnik, minister of science and new technologies (appointed August 19, 1994);
Viktor Khrapunov, minister of energy and the coal industry (appointed March 15, 1995); Kon-
stantin Kolpakov, minister of justice (appointed October 3, 1995); Nikolay Bayev, minister of
ecology and biological resources (appointed October 3, 1995); and Nikolai Radostovets, chair-
man of the State Committee on Anti-Monopoly Policies (appointed April 22, 1996). Skolnik
and Khrapunov have remained fixtures in Kazakhstan’s political life.
11. Karavan, December 15, 1995, p. 2.
12. Delorme, Mother Tongue, Mother’s Touch, pp. 67–70.
13. Kazakhstanskaia pravda, May 29, 1996, p. 3.
14. Kazakhstanskaia pravda, October 9, 1993, insert, as translated in FBIS Daily Report,
USR–94–003, January 12, 1994, p. 44.
15. Ibid.
16. The statement that political authority arose exclusively from “the Kazakh people” was
eliminated from the 1995 constitution, but the new constitution still states in its preamble that
the people of Kazakhstan are charged with the task of “creating a state on the indigenous
Kazakh land.”
17. Nazarbayev, “Ideological Consolidation,” p. 45.
18. Ibid., p. 40.
19. Kazakhstanskaia pravda, May 25, 1996.
20. Lev Gumilev served the first part of a 1950–1956 term in a camp in Karaganda. See Ger-
shtein, Memoirs, pp. 347–48.
21. Gumilev’s works include Drevniaia Rus’ i Velikaia Step’ (Moskva: T-vo Klyshnikov,
Komarov i Ko., 1992); Drevnie Tiurki (Moskva: “Klyshnikov-Komarov,” 1993); Ritmy Evrazii:
276 | Notes to pages 67–77

Epokhi i Tsivilizatsii (Moskva: Ekopros, 1993); and Iz Istorii Evrazii (Moskva: Izd-vo “Iskusstvo,”
1993).
22. Eitzen, Scenarios on Statehood, p. 191.
23. Nazarbayev’s remarks during a speech in 1993.
24. See K. Nurlanova, “The Kazakh National Ideal,” Nauka Kazakhstana, nos. 4, 6, and 8
(1994).
25. Karimov, Uzbekistan na poroge XXI veka, pp. 48–66.
26. See N. A. Nazarbayev, Na poroge XXI veka (Moscow: Oner, 1996), especially section 1,
which is on the collapse of the USSR.
27. For more information on this period, see Olcott, The Kazakhs, pp. 28–53.
28. The three most prominent members of the early, pro-Russian Kazakh secular elite were
Chokan Valikhanov (1835–1865), Ibrahim Altynsarin (1841–1889), and Abai Kunanbayev
(1845–1904). All three were also celebrated during the Soviet period, and their writings were
published in full. For writings by these men, see Chokan Valikhanov, Sobranie sochinenii v piati
tomakh (Alma-Ata: Glav. red. Kazakhskoi Sov. Entsiklopedii, 1984–1985); Ibrahim Altynsarin,
Sobranie sochinenii v trekh tomakh (Alma-Ata, 1925–1938); Abai Kunanbayev, Izbrannye sochi-
nenia (Alma-Ata, 1980).
29. In June 1916, the Russian tsar ordered the conscription into labor units of eighteen- to
forty-three-year-olds from territories corresponding to the present-day regions of the Cauca-
sus and Central Asia, sparking an anti-Russian insurgency throughout the Kazakh territory. For
a more detailed discussion of these events, see Olcott, The Kazakhs, pp. 118–26.
30. Martha Brill Olcott, “The Collectivization Drive in Kazakhstan,” Russian Review, vol. 40,
no. 2 (1981), pp. 122–42.
31. For more on Kazakh attitudes toward their native language and the use of bilingual edu-
cation to spread “Kazakhness,” see Delorme, Mother Tongue.
32. Gudkov, Russkie v Kazakhstane.
33. LAD is a registered political group formed in 1993 and initially led by Aleksandra
Dokuchaeva, who now lives in Moscow.
34. See Gudkov, Russkie v Kazakhstane, p. 17, table 8.
35. See the public opinion survey in ibid., p. 17–18.
36. Jamestown Monitor, November 26, 1997.
37. See Eitzen, Scenarios on Statehood; Laitin, Identity in Formation; N. M. Lebedeva, Novaia
russkaia diaspora: Sotsial’no-psikhologicheskii analiz (Moskva: Institut etnologii i antropologii im
Miklukho Maklaia RAN, 1997); Vitkovskaya, Russians in the Non-Russian Former Republics.
38. See in particular Laitin, Identity in Formation, pp. 105–57.
39. Tishkov, “Ethnicity and Power,” p. 50.
40. See Gudkov, Russkie v Kazakhstane, pp. 17–18 and 31–32.
41. Ibid., table 16.
42. From 1920 to 1924 the territory around Orenburg was merged into the Kirgiz (Kazakh)
Autonomous Soviet Socialist Republic, but in 1924–1925 it was returned to Russia. See Kozy-
bayev, Kazakhskaia Sovetskaia Entsiklopediia, maps on pp. 176–77, 200–201.
43. See “Cossack Chiefs Back Putin for President,” BBC Monitoring, March 18, 2000, and
Pamela Johnson, “Zyuganov Promises to Raise Salaries, Help the Cossacks,” The Russia Journal,
13 March 2000, as published on the Internet web site of ISI Emerging Markets:
<securities.com.ru/c/s.dll/plquer>.
Notes to pages 77–85 | 277

Chapter 4
Trying Pluralism and Abandoning It
1. See Mendybayev, Fomin, and Shelgunov, Kazakhgeit; and Shelley, “Corrupt Oil Practices.”
2. Vrichkina, “Otkrovennoe Khanstvo.”
3. Zheltoksan (December) was named for the month in 1986 when former republic leader
Dinmuhammad Kunayev was replaced, prompting riots. Alash was named in honor of the leg-
endary founder of the Kazakh people and also recalls the name of the first Kazakh political party
and government in 1918–1920.
4. Semipalatinsk oblast was merged into East Kazakhstan in 1997. The Kazakh name for
Semipalatinsk is Semey, but common usage remains Semipalatinsk.
5. See Atakhanova, “The Monster of Semipalatinsk.”
6. Olzhas Suleimenov got into trouble for writing Az i Ya, first published in 1976, which
offered a pro-Turkic view of early Russian history. He survived politically because he enjoyed
the backing of Kazakh party boss Kunayev and so became a target of Gennady Kolbin.
7. Suleimenov continued his writing career in Italy, See his Iazyk pis´ma.
8. Kazakhstan’s National Security Committee and the Procuracy accused the joint-stock
company Nevada-Semey, established under Suleimenov’s Nevada-Semipalatinsk movement, of
illegal export practices involving a shipment of copper (Izvestiya, April 7, 1993, p. 2, as trans-
lated in FBIS Daily Reports, Central Asia, USR–93–051, April 24, 1993).
9. This practice was introduced as a control measure during the 1989 USSR Congress of
Peoples Deputies elections and was a feature in legislative elections in the Russian republic as
well.
10. The method of voting used in Kazakhstan at the time was to select a representative by
crossing out the names of the other candidates; 1,229 candidates contested 270 parliamentary
seats allocated for territorial representatives, while 544 candidates vied for the 90 seats intended
for public organizations. Voter dissatisfaction was sufficient to unseat some of the old-line
politicians.
11. Nazarbayev received 98 percent of the vote in the December 1991 race, with 80 per-
cent of the electorate participating. His only potential opponent reportedly failed to gather the
100,000 signatures necessary to have his name on the ballot.
12. Tereshchenko was Kazakhstan’s prime minister from 1991 to 1994.
13. For more on post-Soviet party formation, see Herbert Kitschelt, Zdenka Mansfeldova,
Radoslaw Markowski, and Gabor Toka, Post-Communist Party Systems: Competition, Represen-
tation, and Inter-Party Cooperation (Cambridge, U.K.: Cambridge University Press, 1999); and
for a comparison with Russia, see Michael McFaul, “Party Formation and Non-Formation in
Russia,” Carnegie Endowment Working Paper 12 (Washington, D.C.: Carnegie Endowment for
International Peace, May 2000).
14. Zinaida Zakaeva and Zaure Sarsenbayeva, Mezhetnicheskie Otnosheniya v sovremennom
Kazakhstane (opyt kompleksnogo sotsiologicheskogo analiza).
15. These figures are for the Kazakhstan Communist Party, whose members consider them-
selves heirs to the CPSU. The Kazakhstan Communist Party was founded in September 1991
but was denied registration as an official party until March 1994. Membership figures and infor-
mation are available on the Internet web site Eurasia.org: <www.soros.org/cen_eurasia/depart-
ments/election/kazakhstan/index.shtml>.
Notes to pages 94–100 | 279

16. “Preliminary Kazakhstan Election Results,” Intercon Daily Report on Russia, October 13,
1999.
17. Information on political parties is available at the official Kazakhstan Internet web site:
<www.president.kz/main/mainframe.asp?lng=en>.
18. Opposition parties have complained of harassment, surveillance, denial of access to the
state-run media, and arbitrary banning from registering candidates, according to Freedom
House’s Freedom in the World 2000–2001 (New York: Freedom House, 2001).
19. See appendix 4 for information on political parties and the results of parliamentary elec-
tions.
20. See Luong and Weinthal, “The NGO Paradox.”
21. From the “Constitution of the Republic of Kazakhstan,” section 8, as published on the
official Kazakhstan Internet web site: <www.president.kz/main/mainframe.asp?lng=en>.
22. See Luong, “Ethno-politics and Institutional Design.”
23. The powers of the maslikhat include: approving of plans, economic and social programs
for the development of the territory, and the local budget; making decisions on issues of local
administrative-territorial organization in their jurisdiction; considering reports by the heads of
local executive bodies; and forming standing commissions and other working bodies of a
maslikhat.
24. See chapter 15, “The Constitution of the Republic of Kazakhstan,” adopted January 28,
1993, for the rights and responsibilities of local government.
25. Luong, “Ethno-politics and Institutional Design,” pp. 323–30.
26. This was true on the Kazakh-Russian, the Kazakh-Kyrgyz, and the Kazakh-Uzbek bor-
ders. The population along the Kazakh-Turkmen border was far less dense than along the
other three.
27. Chernykh, “Russia and Kazakhstan,” p. 9.
28. The northern oblasts clustered in three groups: the northwest (Uralsk, renamed West
Kazakhstan, Kostanai, and Aktiubinsk), the north (Akmola, Petropavlovsk, renamed North
Kazakhstan, and Pavlodar), and the northeast (Ust-Kamenogorsk, including Semipalatinsk
which was incorporated in 1997, renamed East Kazakhstan).
29. Grigorii G. Kosach reports that only three of the twelve raion heads of border districts
have close ties with their Kazakh counterparts. See his unpublished paper, “The Regional Ver-
sion,” pp. 16–17.
30. “Nazarbayev Opposes the Election of Governors,” RFE/RL Daily Report, April 1, 1999.
31. A local businessman, Kayrat Baybaktinov, won the election with almost 53 percent of
the vote (1,773 votes), beating seven other candidates, including the incumbent akim (Bay-
muratov, “Kazakhs”).
32. BBC Monitoring Service, April 13, 2001.
33. See Luong, “The Path Least Resisted.”
34. On April 22, 1997, Taldy Kurgan (pop. 721,000) became part of Almaty region, and
Turgai’s territory (pop. 315,000) was divided between Kostanai and Akmola regions. On May
3, 1997, Zhezkazgan (pop. 496,000) was incorporated into Karaganda, Kokchetau (pop,
664,000) into North Kazakhstan, and Semipalatinsk (pop. 838,000) into East Kazakhstan. All
population statistics are from the 1989 census as published in Naselenie SSSR 1988 (Moscow:
Goskomstat SSSR, 1989), pp. 26–28.
35. Brichkina, “Otkrovennoe Khanstvo.”
280 | Notes to pages 101–107

36. Privileged communications to author.
37. “Kazakhstan’s New Parliament,” Izvestiya, May 12, 1994, p. 4.
38. “New Faces in Parliament,” Sovety Kazakhstana, November 2, 1994, pp. 1–2, as trans-
lated in FBIS Daily Report, Central Eurasia, USR–94–124, November 15, 1994, p. 87.
39. See appendix 4.
40. The position of parliamentary speaker went to Abish Kekilbayev of SNEK, who was also
acceptable to the Kazakh president. See “Kazakh Parliament Chooses New Speaker,” RFE/RL
Daily Report, no. 76 (April 21, 1994).
41. The Respublika group bears no direct relation to the RNPK that was formed in 1998.
42. This first Otan also bears no relation to the mass party of the same name that was orga-
nized in 1999.
43. Karashal Asan-ata (Asanov), author of the trilogy Prizrak nezavisimosti (The Spectre of
Independence), was arrested in November 1998 for “insulting the honor of the presidency” at
a political rally in Almaty. See “Kolonka Vadima Boreiko,” Nedel’ka, November 11, 1998, p. 3.
44. According to Kazakh government statistics, on September 1, 2000, there were 1,258
mass media and information agencies in the country of which 76 percent were privately owned.
Kazakhstan, Country Reports on Human Rights Practices, U.S. Department of State, February
2001.
45. A journalist was dismissed from the television station 31 Kanal for taking a critical posi-
tion of the government. See Civil Society List, April 20, 2000.
46. Human Rights Watch, Kazakhstan.
47. Boris Giller, together with director Sergei Bodrov, produced the award-winning film Pris-
oner of the Mountains, released in 1997.
48. Giller’s printing operation, Franklin Printing, was originally supported with an invest-
ment and loan from the Central Asian American Enterprise Fund and printed materials from
the independent press of Kazakhstan and Kyrgyzstan.
49. For an account of pressure on the press see Sharipzhan, “Mass Media in Kazakhstan,”
pp. 13–15.
50. For an example of the international protest of the shutdown of XXI Vek, see the letter
written by Ann K. Cooper, executive director of the Committee to Protect Journalists (CPJ) to
Nursultan Nazarbayev as published on the CPJ Internet web site: <169.132.35.44/
protests/98ltrs/kazakstan30sept98.html>.
51. Human Rights Watch, World Report 1999: Kazakhstan, published at Human Rights
Watch Internet web site: <http://www.hrw.org/worldreport99/europe/kazakhstan.html>.
52. Human Rights Watch, country report for Kazakhstan, 1998.
53. The new law introduces limitations on transmissions by foreign media and stricter
controls on publishing Internet newspapers.
54. These complaints are detailed in Human Rights Watch’s report Kazakhstan.
55. These included 136 from the Ministry of Internal Affairs, 14 from the court system, 10
from the prosecutor’s office, 26 from customs agencies, 30 from tax agencies, 9 from the bank-
ing system, 62 from local self-government bodies, and 210 from other state authorities. “Kazaks
Crack Down on Corruption in Judiciary,” Interfax-Kazakhstan, April 20, 2000.
56. “Unemployment, Corruption, Top Kazakh Worry List, Polls Show,” Nachnem s ponedel-
nika, April 7, 2000.
Notes to pages 107–113 | 281

57. “Independent Newspapers Shut Down for Reprinting Corruption Allegations from For-
eign Media,” CSJ Action Alert, August 9, 2000.
58. See the Eurasia Information and Analysis Center’s Freedom of Speech and Mass Media in
Kazakhstan as published in 1998 on the Internet web site of the International Eurasian Insti-
tute for Economic and Political Research: <iicas.org/english/publruss.htm>.
59. Jusupov, “Analiz predposylok,” p. 11.
60. Other candidates included Serik Abdrakhmanov of SNEK and Olzhas Suleimenov of
the Congress Party. Like Suleimenov, Abdrakhmanov (a former Komsomol leader) had formed
his own nationwide ecology group, Elim-ai, and was also said to have used the money from
dues to amass a personal fortune. Both men receded from public life without the charges hav-
ing been proved, Abdrakhmanov to private business.
61. Abdildin became the first secretary of the Communist Party of Kazakhstan in April
1996.
62. “Kazakh Parliament Steps up Challenges,” Sovety Kazakhstana, November 2, 1994, pp.
1–2, as translated in FBIS Daily Reports, Central Eurasia, USR–94–124, November 15, 1994,
p. 87.
63. See Almaty Panorama, March 11, 1995, p. 2, as translated in FBIS Daily Reports, Cen-
tral Asia, SOV–95–049, March 14, 1995; Kommersant-Daily, March 15, 1995, p. 4, as trans-
lated in FBIS Daily Reports, Central Asia, SOV–95–067–S, April 7, 1995; Kazakhstanskaia
pravda, March 15, 1995, p. 1, as translated in FBIS Daily Reports. Central Asia, SOV–95–052,
March 17, 1995. For the text of the court’s ruling, see Kazakhstanskaia pravda, March 16,
1995, p. 3, as translated in FBIS Daily Reports, Central Asia, SOV–95–055, March 22, 1995.
64. Suleimenov, a major general in the Ministry of the Interior, had previously served as the
head of the Kazakh Communist Party Central Committee Department of Administrative Affairs
during Kolbin’s cleanup. Leonid Nikitinsky, “The Journalist against the Central Electoral Com-
mission,” Moskovskiye novosti, no. 31, April 30–May 7, 1995, p. 14, as translated in FBIS Daily
Report, SOV–95–97.
65. In December 2000, Suleimenov became the first deputy minister responsible for
Kazakhstan’s interior troops, and in June 2001, he was appointed the commander of interior
troops.
66. He retained the power to name his cabinet (still subject to parliamentary approval) and
all other government officials and gained the power to sponsor all legislation and to declare
states of emergency that put the constitution in abeyance.
67. These goals were: to secure the independence and sovereignty of Kazakhstan; to break
away fully from the old economic and political system; to provide economic and political free-
dom—but not at the expense of social security; to develop Kazakhstan’s human resources; to
develop Kazakhstan’s natural resources; to make good use of the nation’s land; to provide
political stability; and to strive for an atmosphere of tolerance and mutual respect in
Kazakhstan’s population.
68. These were the strengthening of national security through the development of the
energy sector and by formulating a military doctrine; promoting the internal stability of the
country; encouraging economic growth; creating a good investment climate; and improving the
quality of government service; as well as eliminating corruption.
69. The 67 seats in the 1995 Majilis were divided as follows: People’s Union Party, 24
seats; Democratic Party, 12 seats; Peasants Union, 5; Trade Unions Federation , 5; Communist
282 | Notes to pages 113–118

Party of Kazakhstan, 2; independents and others, 19. (Central Intelligence Agency, CIA World
Factbook 1999, Kazakhstan entry. See appendix 4 in this volume.)
70. The debt of the State Pension Fund accounted for 20 percent of the 1996 budget. The
privatization of the electric power and oil companies throughout 1997 generated signing
bonuses of more than $300 million that was used to pay down the debt. See Business Infor-
mation Service for the Newly Independent States (BISNIS), “Commercial Overview of
Kazakhstan,” BISNIS Report, June 1998.
71. “Pension Reform Looms in Kazakhstan,” Jamestown Monitor, June 13, 1996.
72. “Under Pressure, Kazakhs Pass Pension Bill,” Panorama, June 14, 1996, p. 3.
73. See the text of the Language Bill N–151–1, published in Russian: “Zakon Respubliki
Kazakhstan ot 11 iiulia 1997 goda N 151–1: O Iazykakh v Respublike Kazakhstan,” passed into
law July 11, 1997.
74. “Kazakhs Pass Language Bill,” Itar–Tass World Service, July 15, 1997, as translated in
FBIS Daily Reports, Central Eurasia, SOV–97–196, July 16, 1997.
75. Cummings, Kazakhstan, p. 60.
76. Baildinov, “Kazakh Government Reorganizes.”
77. Marchenko was credited with the development of Kazakhstan’s stock market and its
security-based pension scheme (“Security Commission Chair Resigns,” United
States–Kazakhstan Council News Wires, October 15, 1997).
78. The former deputy prime minister left public life under a cloud of corruption in Sep-
tember 1994 (“New Kazakh Ministers Appointed,” United States–Kazakhstan Council News
Wires, October 17, 1997).
79. In February 1999, Kalmurzayev was appointed the head of the president’s administra-
tion, and in April 2001, he was made the head of Kazakhstan’s State Property Committee.
80. In April 1998, Nurlan Kapparov was named the head of Kazakhoil, the Kazakh state
oil company, and Mukhtar Ablyazov of Astana Holding became the minister of energy, trade,
and industry.
81. Among the ranks of the “young Turks” were Bulat Abilov, the president of Butya, a large
trading company; Mukhtar Ablyazov of Astana Holding, one of the biggest trading and indus-
trial groups in Kazakhstan; and Kapparov, who before heading Kazakhoil ran a vodka and sugar
trading company.
82. “Mynbayev Narrowly Escapes Impeachment,” Panorama, no. 41 (October 1998).
83. “Kazakhstan to Hold Early Presidential Elections,” Intercon Daily Report on Russia, Octo-
ber 8, 1998.
84. Kazymzhomart Tokayev remained as foreign minister, Kairbek Suleimenov as interior
minister, and Muhtar Altynbayev as defense minister.
85. “Kazakh Security Committee Chair Dismissed,” Moscow Interfax, August 9, 1999, in
FBIS–SOV–1999–0809, August 9, 1999.
86. “Majilis Threaten No Confidence Vote,” Moscow Interfax, February 12, 1999,
FBIS–SOV–1999–0212, February 12, 1999.
87. “Opposition Leader Seeks Position of Prime Minister,” Moscow Interfax, November 23,
1998, FBIS–SOV–98–327.
88. “Nazarbayev Slams Cabinet,” Moscow Interfax, September 1, 1999, in
FBIS–SOV–1999–0901.
Notes to pages 118–122 | 283

89. “Budget Debate Continues in Astana,” Moscow Interfax, September 2, 1999,
FBIS–SOV–1999–0902, September 2, 1999.
90. Tokayev was confirmed by parliament as prime minister on October 13, 1999.
91. The Agency for Economic Planning changed to the Ministry of Economy; the Agency
for Strategic Planning and Reforms was split into the Agency for Strategic Planning directly
under the president, and all its former financial and economic functions were transferred to the
Ministry of Economy; the Ministry of Education, Health, and Sports, and the Ministry of Sci-
ence and Higher Education merged into a single Ministry of Education and Science. The other
functions were handed over to the new Agency for Health and Agency for Sports and Tourism,
which are not part of the government. The Atomic Energy and Space Ministries were trans-
ferred from the former Ministry of Science and the Ministry of Higher Education to the Min-
istry of Energy, Industry, and Trade.
92. “Tokayev Government Settles In,” Panorama, no. 8 (February 15, 1999).
93. The new government had three Russians: Vladimir Schkolnik, a former head of the ore-
enriching combine in Aktau; First Deputy Prime Minister Aleksandr Pavlov, who had served
in the Tereshchenko government; and Nikolai Radostovets, formerly in charge of the antimo-
nopoly committee, who became the minister of labor and social security.
94. Michael Dobbs reports that in this period Akin, Gump received $1 million in fees, the
Carmen Group $700, 000, and Mark A. Siegel Associates $470,000 (Michael Dobbs, “Invest-
ment in Freedom Is Flush with Peril,” Washington Post, January 25, 2001, p. 1).
95. This author received several phone calls from Mark Siegel Associates during the run-
up to the election and a visit from Mark Siegel himself.
96. See Address of the President of the Republic of Kazakhstan to the People of Kazakhstan,
“The Situation in the Country and the Major Directions of Domestic and Foreign Policy:
Democratization [and] Economic and Political Reform for the New Century,” September 30,
1998.
97. The movement was formed on October 2, the demonstration held on October 10, and
Kazhegeldin was convicted on October 15.
98. Moscow Itar–Tass, April 20, 1996, as translated in FBIS Daily Reports, Central Asia,
SOV–96–078, April 23, 1996.
99. This was more than a hundred times the minimum monthly wage at the time.
100. See the OSCE’s report, “The Republic of Kazakhstan Presidential Election, January 10,
1999, Assessment Mission,” released on February 5, 1999, available on the OSCE Internet web
site: <www.osce.org/odihr/election/kazak1-2.htm>.
101. See International Foundation for Election Systems (IFES) Election Guide, as posted
on the Internet: <http://www.ifes.org/eguide/resultsum/kazakhstanres.htm>.
102. It also stipulated that political parties should receive at least 7 percent of the popular
vote to be able to contest ten seats in the Majilis. For each party member on the party list the
Central Election Commission should receive a deposit equivalent to twenty-five times the
minimum wage. Parties that clear the 7-percent barrier are reimbursed for this expense.
103. “Kazakh Opposition to Try to Get the Existing Government to Resign,” Interfax-
Kazakhstan, September 16, 1999.
104. Otan received 30.89 percent of the vote; the Communists, 17.75 percent; the Agrar-
ian party, 12.63 percent; the Civil Party, 11.23 percent; the Azamat, 4.57 percent; the People’s
284 | Notes to pages 123–133

Congress of Kazakhstan, 2.83 percent; the Alash party, 2.76 percent; the Revival Party 1.97 per-
cent; and the Labor Party, 1.38 percent (Interfax, October 17, 1999).
105. Without specifying the reasons, the Central Election Commission declared invalid the
results of the second round of voting in four of forty-seven districts. New elections in those dis-
tricts were held on December 26, 1999.
106. The composition of the Majilis was as follows: Otan received 20 seats in single-
mandate districts, for a total of 24 seats; the Civil Party received 9 for a total of 11; the Com-
munist Party received 1, for a total of 3; the Agrarian Party received 1, for a total of 3; RNPK
received 1, for a total of 1; People’s Cooperatives received 1, for a total of 1; business groups
received 10, for a total of 10; progovernment candidates received 20, for a total of 20; and other
groups received 4, for a total of 4. Source: OSCE/ODIHR report. See appendix 4.
107. “CIS Sees No Irregularities in Kazakh Elections,” Moscow Interfax, October 11, 1999.
108. “Unsuccessful Candidate Seeks Asylum in the UK,” Itar–Tass, October 27, 1999, as
translated by FBIS–SOV–1999–1027.
109. To examine some of the claims being made surrounding Nazarbayev’s alleged hidden
assets, see “Otkrovennoe Khanstvo,” filed under Nazarbayev on the Internet web site of Com-
promat.ru: <www.compromat.ru/main/Nazarbayev/a.htm>.

Chapter 5
Economic Development or Stealing the State?

1. Karavan-Blitz, July 12, 1996, p. 2, as translated in FBIS Daily Report, SOV–96–140,
p. 45.
2. See appendix 5 for the GDP of Kazakhstan, 1991–2001.
3. UN Development Program, Human Development Report 2001 (New York: Oxford Uni-
versity Press, 2001), p. 146.
4. The Former Soviet Union in Transition, papers submitted to the Joint Economic Commit-
tee, Congress of the United States, May 1993, vol. 2, p. 937. The net material product is a mea-
sure formerly used by most centrally planned economies but now largely superseded. It
purported to measure the output of goods and services but excluded certain public services and
thus has a narrower coverage than the GNP.
5. See the work of David G. Tarr in “The Terms-of-Trade Effects of Moving to World Prices
on Countries of the Former Soviet Union,” Journal of Comparative Economics, vol. 18, no. 1 (Feb-
ruary 1994), pp. 1–24.
6. During this time, the railway fees for transit through Russia were raised as part of an
attempt to increase Kazakh dependence on Russia.
7. See the discussion of the ruble zone in Olcott, Åslund, and Garnett, Getting It Wrong,
pp. 46–48.
8. Four countries introduced their national currencies before Kazakhstan: Azerbaijan
(August 1992), Belarus (July 1993), Kyrgyzstan (May 1993), Georgia (August 1993), and
Ukraine (November 1992).
9. “Economic Crisis Spills into Kazakhstan,” Interfax, October 21, 1998. By January 2001,
the tenge traded at $1 to 145.42 tenge.
Notes to pages 134–140 | 285

10. Interfax, “Investment Report of Central Asia and Caucasus,” December 27, 1999–
January 9, 2000, vol. 3, no. 1 (58), in FBIS–SOV–2000–0111, January 11, 2000.
11. Economist Intelligence Unit, Country Report, Kazakhstan, November 22, 1999.
12. Interfax, December 27, 1999–January 9, 2000, vol. 3, no. 1 (58), in
FBIS–SOV–2000–0111, January 11, 2000.
13. Economist Intelligence Unit, Country Report, Kazakhstan, August 18, 1998.
14. Interfax, December 21, 1998, in FBIS–SOV–98–355, December 21, 1998.
15. For 1999 figures, see Interfax, January 24–30, 2000, vol. 3, no. 4 (61), in
FBIS–SOV–2000–0131, January 31, 2000.
16. For 1999 figures, see Interfax, February 7–13, 2000.
17. For 1999 figures, see International Monetary Fund, Direction of Trade Statistics Quarterly
(Washington, D.C.: IMF, 2000), p. 145.
18. “Russia Gains Control of Power Grid in Debt-Equity Swap,” Financial Times, January 28,
1997, p. 6.
19. Former KGB boss Yuri Andropov succeeded Leonid Brezhnev as General Secretary of
the Communist Party of the Soviet Union.
20. For a dissenting perspective on this, see Anders Åslund, “The Myth of Output Collapse
after Communism” (Washington, D.C.: Carnegie Endowment for International Peace, Decem-
ber 2000). See Carnegie Internet web site: <http://www.ceip.org/files/publications/aslund-
output.asp?pr29from=pubauthor>.
21. For 1999 figures, see European Commission, Economic Trends: Kazakhstan, April–June
1999, p. 31.
22. Ibid., p. 164.
23. Sander Thoenes, “Kazakhstan’s Sale of the Century,” Financial Times, October 25, 1996,
p. 28.
24. Auezov, “Corporate Securities,” p. 12.
25. Kalyuzhnova, The Kazakhstani Economy, pp. 75–76.
26. Twenty of the funds managed to accumulated more than 60 percent of the vouchers,
while another nineteen funds gathered about 20 percent.
27. The Kazhegeldin government passed significant legislation on property rights and in the
1995 Civil Code established the basic freedoms of entrepreneurial activity, including the right
to own and operate a business without government interference.
28. Itar–Tass, “New Stage of Kazakh Privatization,” March 20, 1996, in FBIS–SOV–96–057,
March 20, 1996.
29. Interfax-Aif, January 27, 1997, no. 4, issue 82.
30. See Kalyuzhnova’s description of “privatization through the individual projects” in The
Kazakhstani Economy, p. 76.
31. The Pavlodar Aluminum Plant went to White Swan Ltd., the Sokolov-Sarbai Mineral
Conglomerate to Ivedon International Ltd., and KazChrome to Japan Chrome Corp. These con-
tracts to subsidiaries of Trans-World Metal Corporation attracted scrutiny in the press. See
Richard Behar, “Capitalism in a Cold Climate,” Fortune, June 12, 2000, pp. 194–200.
32. Lev and Mikhail Chernoy engaged in a business partnership with the Trans-World
Group only to eventually become apparent rivals. Both were accused of links with organized
crime by Russian Interior Minister Anatoly Kulikov in 1997. Mikhail Chernoy, who has been
banned from entering Bulgaria, France, Great Britain, Switzerland, and the United States
286 | Notes to pages 140–143

because of suspicions he has links to the criminal world, is rumored to have been involved in
the murder of competitors in the aluminum industry. See Behar, “Capitalism”; “Lev Chernoi,
Kak Zerkalo Banditskogo Kapitalizm,” as published on the Internet web site Kompromat.ru:
<www.compromat.ru/main/chernoy/zerkalo.htm>; and “Mikhail Chyorny Looks for Land to
Call His Own,” Moscow Times, November 11, 2000, pp. 2–3.
33. Peck, “Foreign Investment,” p. 477.
34. “Turning Cheap Steel Mills into Gold,” Business Week, May 27, 1996, p. 108 E–4.
35. See Horton, “Bankruptcy Kazak Style,” pp. 349–56.
36. Vera Avaliani, “Kazakhstan Privatization to Go On,” United Press International, March 13,
1996.
37. Interfax Kazakhstan, January 28, 1998, in FBIS–SOV–97–019.
38. The Kazakh government decreed on June 6, 1997, that the shares of the following enter-
prises would be offered through the stock exchange by the end of 1997: metal producers
Kazakhstan Aluminum Company, Kazchrome, Shymkent Lead Plant, Jezkasgantsvetmet, Ust-
Kamenogorsk Titanium Magnesium Combine, Sokolov-Sarbai Mining Production Unit, and
Yuzhno-Toparskoye Ore Mining Company; oil producers Mangistaumunaigaz and Aktyube-
munaigaz; Borly Coal Mines; Halyk Savings Bank, the country’s largest bank; and Atakent, the
top exhibition and trade center in Almaty. Auezov, “Corporate Securities,” p. 15.
39. “Small Business Privatization Winds Down in Kazakhstan,” Financial Times, London edi-
tion, June 26, 1998, p. 31.
40. European Commission, Kazakhstan Economic Trends, Third Quarter 1998 (Brussels: Euro-
pean Commission, 1998), p. 178. This source also lists privatization for principal sectors of the
economy. In industry, 82.2 percent of small enterprises, 11.3 percent of medium enterprises,
and 6.5 percent of large enterprises were privatized as of the third quarter of 1998. For con-
struction, these figures were 86.9, 9.7, and 3.4 percent, respectively. Of small agricultural
enterprises, 64.5 percent were privatized by that point, as were 17.9 percent of medium enter-
prises and 18.0 percent of large enterprises. The transportation and communication sector had
privatized 77.6 percent of its small enterprises, 16.3 percent of medium enterprises, and 6.1
percent of large enterprises. For trade and catering, the figures were 95.6, 3.8, and 0.5 percent,
respectively. Finally, personal and public services had privatized 94.1 percent of small enter-
prises, 4.9 percent of medium enterprises, and 1.0 percent of large enterprises by the third
quarter 1998.
41. 1998–2000 KAMAL Consortium, Pavlodar, Kazakhstan, Reuters, January 12, 2000. See
<http://www.pavlodar.com/nfrk/nfrknews.shtml?datfile=vJ9iwI8hqrCsFwst0aHz12d7FvHvY_qtSi>.
42. In addition, no more than 40 percent can be invested in second-level band deposits,
no more than 30 percent in international financial organization securities, and no more than
30 percent in Kazakh Stock Exchange A–listed securities. Interfax Daily Business Report, Feb-
ruary 14, 2000.
43. “Wonderful Business Opportunities Offered by This Former Soviet Republic,” Finan-
cial Times, Asia Intelligence Wire, March 22, 2000.
44. “The Extent of Corruption,” Karavan, May 20, 1994, p. 2.
45. “News and Issues: Kazakhstan,” Watson Wyatt Worldwide, May 1999, published on the
Watson Wyatt Internet web site: <www.watsonwyatt.com/homepage>.
46. In May 2001, the government of Kazakhstan created a new company, TransNefteGaz,
which combined KazTransOil, KazTransGaz, and a number of other companies, including a 50-
Notes to pages 143–148 | 287

percent stake in KazTransFlot. The new company will handle marketing, operate oil and gas
pipelines, organize financing, develop feasibility studies, build new pipelines, and take part in
all Kazakhstan’s domestic and international hydrocarbon transport projects.
47. “Privatization Stalled in Kazakhstan,” Jamestown Monitor, vol. 6, no. 105 (May 30,
2000).
48. OKIOC was formed in 1993; in September 1998, Kazakhstan sold its share of the con-
sortium to Phillips Petroleum, based in the United States, and Inpex of Japan. Kazakhstan will
continue to profit from the consortium, however, through taxes, royalties, and bonuses. In the
summer of 2001, after Italy’s ENI Agip became sole operator, OKIOC was renamed AgipKCO.
49. Nursultan Nazarbayev, Kazakhstan 2030, as published on the official Internet web site
of Kazakhstan: <www.president.kz/main/mainframe.asp?lng=en>.
50. For 1999 figures, see “Foreign Direct Investment in Kazakhstan,” as published on the
Internet web site of the Agency of the Republic of Kazakhstan on Investments:
<http://www.kazinvest.com/eng/default.htm>.
51. For 2000 figures, see Interfax Kazakhstan, March 1, 2000.
52. Samsung first entered Kazakhstan in 1995 when Samsung Deutschland Gmbh received
a management contract for Zhezkazgantsvetmet. For an account of their problems, see Peck,
“Foreign Investments,” p. 481.
53. See Matthew J. Sagers, “The Nonferrous Metals Industry of Kazakhstan,” Post-Soviet
Geography and Economics, vol. 39, no. 9 (1998), p. 507. The remaining 22.6 percent of shares
are held by undisclosed individuals.
54. The IMF provided a $290 million loan in 1994. The economic reform program touted
by the IMF sought to reduce inflation and stabilize the exchange rate, along with encouraging
deregulation, privatization, and reform of the social insurance system.
55. See appendix 7 for a description of these programs. For a discussion of the role of inter-
national financial institutions in Kazakhstan, see Richard M. Auty, The IMF Model and Resource-
Abundant Transition Economies: Kazakhstan and Uzbekistan, United Nations Working Paper 169,
November 1999.
56. See International Monetary Fund, Kazakhstan IMF Economic Review (Washington, D.C.:
IMF, May 2000).
57. He has remained in Nazarbayev’s inner circle, serving briefly as Kazakhstan’s ambas-
sador to Belgium, where he is said to have involved himself in the Tractebel transaction scan-
dal (discussed later in this chapter) and then was briefly named mayor of Almaty. Later he
headed the Kazakh mission to NATO, and in May 2001 he was appointed the minister of Agri-
culture.
58. “Foreign Investors Dominate Kazakhstan’s Industry,” OMRI Daily Digest, December 13,
1996.
59. Wood MacKenzie, quoted in Jaffee, Unlocking the Assets, table 3.
60. For an extensive discussion of Kazakhstan’s oil and gas potential, see Ebel, Energy
Choices, chapter 4.
61. James Giffen, a former New York banker who now heads Mercator and who is also an
official adviser to Nazarbayev, was placed under investigation by the U.S. Justice Department
for laundering money to Switzerland. Giffen, who had served as an adviser to Nazarbayev
during the negotiations with Western oil companies for drilling rights, is also under investi-
gation by the Justice Department for violating the Foreign Corrupt Practices Act. Giffen claims
288 | Notes to pages 148–152

that his post as Nazarbayev’s adviser makes him an official in a foreign government and hence
not subject to the provisions of the act. See the following: Louise Shelley, “Corrupt Oil Prac-
tices Implicate President Nazarbayev,” Central Asia/Caucasus Analyst, July 19, 2000; Paul Samp-
son, “Middleman Caught Up in Kazakh Oil Inquest,” Oil Daily, July 7, 2000; and Michael
Dobbs, David Ottaway, and Sharon LaFraniere, “American at Center of Kazakh Oil Probe;
Insider Linked to Payments to Foreign Officials,” Washington Post, September 25, 2000, p. A1.
62. Hugh Pope, “Corruption Stunts Growth in ex-Soviet States—Struggle in Kazakhstan is
the Apparent Spark for U.S. Investigation,” Wall Street Journal, July 5, 2000, p. A17.
63. These consortia are described in appendix 10.
64. The figures for 1997 are taken from Economist Intelligence Unit, Country Reports,
Kazakhstan, 1998; all other figures are found in EIU Reports, 1997.
65. International Monetary Fund, Kazakhstan.
66. Crude oil production data are from the International Energy Agency’s Internet web site:
<www.iea.org>.
67. According to Minister for Energy, Industry, and Trade Asygat Zhabagin, the four pipeline
projects with the highest priority for the Kazakh government are: rebuilding and upgrading the
Atyrau-Samara pipeline, which ships oil to Russia; the CPC’s pipeline connecting the Tengiz oil
field and Russia’s Novorossiisk-2 terminal; a new Transcaspian pipeline through Aktau, Baku,
and Turkey to the Mediterranean; and a pipeline connecting Kazakhstan and China (Petroleum
Report, vol. 6, no. 14 [327], March 27–April 3, 1998, p. 19). The remaining two are the eco-
nomical but controversial pipelines through Iran to the Persian Gulf and the similarly contro-
versial route through Afghanistan (Alfa Capital Kazakhstan, “The Kazakh Economy,” August 13,
1998).
68. Economist Intelligence Unit, Kazakhstan: Oil and Gas Report, February 23, 2000.
69. See Julia Nanay, “Export Markets for Oil from the CIS and the Caspian Region,” pre-
sentation at the Oil and Gas Transportation in the CIS and Caspian Forum, Vienna, October
10, 2000.
70. Neftegazovaya Vertikal, “Chevron Verit v Kazakhstan, Kazakhstan Verit v Chevron,”
September 30, 2001.
71. “Kazakhstan Economy,” published on the Internet web site of the U.S. Energy Infor-
mation Agency: <www.eia.doe.gov>, April 4, 2000.
72. This group is the Oman Oil Corporation, controlled by the Omani government, which
was instrumental in arranging the financing of the CPC pipeline.
73. Martha Brill Olcott, Central Asia’s New States (Washington, D.C.: United States Institute
of Peace Press, 1996), p. 79.
74. Olcott, The Kazakhs, p. 294.
75. A few years later, Chevron paid the government of Kazakhstan $660 million for a sim-
ilar 5 percent stake. Moscow Interfax, October 3, 1997, as translated in FBIS Daily Reports,
SOV–97–276, October 6, 1997.
76. Officials cite the Russian-Iranian Treaty of 1921 and the Soviet-Iranian Treaty of 1941.
77. For a more detailed analysis of the territorial dispute over the Caspian, see Bolukbasi,
“Caspian Sea Mineral Resources.”
78. For a discussion of Kazakhstan’s earlier position on the Caspian and the evolution of
its relations with Russia on oil questions, see Babak, “Kazakhstan.”
Notes to pages 152–156 | 289

79. The agreement, signed on July 6, 1998, divides the seabed and mineral resources of the
northern Caspian between Russia and Kazakhstan. It leaves the waters and biological resources
of the sea under the common control of the littoral states. It specifically states that it “does not
preclude” a future agreement between all five littoral states as to the permanent legal status of
the Caspian.
80. “Pipeline Politics in Istanbul,” Financial Times, November 19, 1999, p. 17.
81. Nursultan Nazarbayev, speech at the Baker Institute, Rice University, Houston, Novem-
ber 21, 1997.
82. TotalFina Elf, BG Plc, and Agip were said to be a part. Kazakhstan Weekly Business News,
as reported by Turkestan Newsletter, December 22, 2000.
83. Economist Intelligence Unit, Kazakhstan: Oil and Gas Report, February 23, 2000.
84. Jaffee, “Unlocking the Assets.”
85. A production-sharing agreement (PSA) is a contract between an investor and a national
government that grants the investor exclusive rights to prospect for and extract mineral
resources from a specific site and provides the investor with a guaranteed tax and royalty
structure, generally including temporary tax relief.
86. Chinese sources estimated that the Uzen field contains 207 tons of recoverable resources
(Beijing Xinhua, November 6, 1997, as translated in FBIS Daily Report, CHI–97–310, Novem-
ber 7, 1997). According to Itar–Tass, it is second in size only to the Tengiz oil field. Itar–Tass,
September 24, 1997, as translated in FBIS Daily Report, SOV–97–267, September 24, 1997.
87. Itar–Tass, September 24, 1997, in FBIS Daily Report, SOV–97–267, September 24,
1997. Kazakhstan was able to justify giving China the rights to Uzen because China was the
only country that offered to build a pipeline. Even though Uzen is second in size in Kazakhstan
to the Tengiz field, it is still small by world standards and would not normally justify such con-
struction.
88. RFE/RL Newsline, April 9, 1999.
89. For a detailed discussion of the situation, see Interfax Oil and Gas Report, January
28–February 3, 2000, vol. 4, no. 419.
90. Access Industries is hoping to arrange to swap oil from the Uzen field, bringing it to
refineries in Tiumen until the Chinese complete their pipeline.
91. Itera is reputed to be a foreign-based and privately owned spin-off of Russia’s Gazprom.
92. The new company, TransNefteGaz, in addition to combining KazTransOil, KazTransGaz,
and a 50 percent stake in KazTransFlot, also includes a 90-percent stake in Aktiubin-
skneftesvyaz, 99 percent of Munai-Impex, 90 percent of Kaztranssvyaz, 100 percent of the
Atyrau international airport and helicopter company Euro-Asia Air, and 3.5 percent of the com-
munication company Bailanys.
93. Interfax, “Central Asia Report,” July 30, 1998.
94. Nazarbayev announced the creation of the National Oil Fund in May 2000. The fund
was meant to be an extrabudgetary institution that would help Kazakhstan set aside profits from
the sale of oil and gas to avoid “the Dutch disease.” In 2001, Kazakhstan announced that it had
deposited $660 million from the sale of its stake in the Tengiz field.
95. Kazakhstan NewsWire, February 15, 2000.
96. See the Internet web site of Report on Business Magazine: <http://
www.robmagazine.com/archive99ROBdecember/html/moving_target.html>.
290 | Notes to pages 157–164

laundering involving the purchase of a villa outside Brussels by a Belgian judge. During this
time it was also reported that he was under investigation for a payment to him by Tractebel.
See Steve LeVine, “Three Prominent Kazakhstan Businessmen Are Charged in Money Laun-
dering Feud,” Wall Street Journal, July 6, 2001, p. 3.
123. For the campaign contributions of the Blavatnik family, see the disclosure reports of
the United States Federal Election Commission, published on its web site:
<herndon1.sdrdc.com/cgi-bin/qind>. For more on Blavatnik, see Dan Morgan and Michael
Dobbs, “Washington Lobbying Oils Russian Capitalism,” Washington Post, October 27, 1999,
p. A1.
124. Halliburton, Inc., will receive $292 million of those funds to refurbish the massive
Samotlor oil field in Siberia that is owned by TNK.
125. Interfax Daily Business Report, February 14, 2000.
126. The Vasilkovskoe deposit has been billed as Kazakhstan’s largest gold deposit and the
fourth largest undeveloped gold deposit in the world. It is located in Akmola oblast and was
discovered in the mid-1960s. Vasilkovskoe is estimated to hold 382 tons of gold. Bakyrchik,
located in East Kazakhstan oblast, contains an estimated 326 tons of gold. It is rated as one of
the largest gold deposits, not only in the former Soviet Union, but in the world. See Matthew
J. Sagers, “Gold Production in Central Asia,” Post Soviet Geography and Economics, vol. 39, no.
3 (1998), pp. 140–41.
127. European Commission, Kazakhstan Economic Trends (Brussels: European Commis-
sion, 1998), April–June 1998, table 9.2, p. 132.
128. Kazakhstan’s gold production increased from 8.9 tons in 1998 to 9.6 tons in 1999 and
was estimated to have increased further in 2000. See Economist Intelligence Unit, Country
Report for Kazakhstan, November 2000.
129. Loutchansky, described by Time as “the most pernicious unindicted criminal in the
world,” heads Nordex, a company based in Vienna that, according to former CIA director
John Deutch, is “an organization associated with Russian criminal activity.” Among other alle-
gations, Nordex is said to be involved in the smuggling of nuclear materials (“60 Minutes
Interviews Grigori Loutchansky,” December 6, 1998).
130. Leviev was born in Tashkent, Uzbekistan, and emigrated to Israel. He now controls
the Africa Israel Investment Ltd., one of the world’s leading producers of diamonds. He also
reportedly has close ties with both Nazarbaev and Putin. See Hanan Sher, “Sabbath Warrior,”
The Jerusalem Report, April 17, 1997, p. 22.
131. Arkady Gaidamak was born in the Soviet Union but emigrated to Israel in the early
1970s. He was alleged to be involved in supplying illegally obtained Russian arms to the gov-
ernment of Angola, in addition to money laundering in partnership with Jean-Christophe Mit-
terrand, the son of the late French president. See Dmitry Babich, “The Mafia in Angola,”
Moscow News, January 24, 2001, p. 4.
132. The article links Vasilkovskoe to Floodgate Holding, Ltd., in the Dutch West Indies.
See A. Isaev and V. Shtyrkov, “Levaev i pustota,” Aziopa, June 5, 2001.
133. In August 1996, the Friedland-controlled Indochina Goldfields, which already held
15 percent of the Bakyrchik Ltd. stake in the mine, bought an additional 65 percent from its
partner in a $65 million deal. In December 1996, Indochina bought a 60-percent share in the
mine from the government of Kazakhstan.
134. “Bakyrchik Rises Again,” Mining Journal, June 1, 2001, p. 423.
292 | Notes to pages 167–173

1. Itar–Tass, January 29, 1999, as translated in FBIS Daily Report, SOV–99–029, February
1, 1999.
2. Itar–Tass, World Service in English, April 19, 1999, as translated in
FBIS–SOV–1999–0419.
3. “Kazakh Prosecutor-General: Bureaucrats Brake Fight against Corruption,” Interfax-
Kazakhstan, July 23, 1999.
4. The Nazarbayev family allegedly has used offshore accounts and holding companies to
divert capital from Kazakhstan. One of the allegations is that Nazarbayev used the Kazakhstan
Fund, set up in 1995, with an account at United Overseas Bank in Geneva, to spirit millions
Notes to pages 173–176 | 293

of dollars out of the country and into an anonymous and protected bank account (“Shchet no.
35877 grazhdanina s pasportom 0000001,” Novaia gazeta, January 22, 2001).
5. The Corruption Perceptions Index is a composite index that draws on seventeen polls
and surveys from ten institutions (“New Corruption Index Released by Transparency Interna-
tional,” Preventing Business Fraud, June 2000, p. 4). In the 2001 Transparency International
Rankings, Kazakhstan improved its ranking to seventy-first but still remained behind deeply
corrupt states like Moldova (sixty-third), although ahead of Russia (seventy-ninth). See the
Internet web site of Transparency International: <www.transparency.org>.
6. See appendix 2: “Population of Kazakhstan by Nationality, 1989 and 1999.”
7. UNDP figures for 1997 show that ethnic Kazakhs made up 50.6 percent of the popula-
tion, with Russians making up 32.2 percent, and other nationalities 17.2 percent (UN Devel-
opment Program, Kazakhstan 1998, p. 77).
8. Kaiser and Chinn, “Russian-Kazakh Relations.”
9. “Internal Migration in Kazakhstan for the 1Q of 1998,” Delovaya nedelya, July 31, 1998.
10. Ethnic Kazakhs make up a minority of the population in Akmola oblast (37.4 percent
of the total), East Kazakhstan oblast (48.5 percent), Karaganda oblast (37.6 percent), Kostanai
oblast (31.1 percent), Pavlodar oblast (38.2 percent), North Kazakhstan oblast (29.5 percent),
Astana city (40.9), and Almaty city (38.5) (Pervaia natsional’naia peripis’ naseleniia, 1999).
11. According to the 1999 census, ethnic Kazakhs account for 18.8 percent of the popu-
lation in Kostanai, 24.2 percent in Karaganda, and 24.0 percent in Pavlodar. In other princi-
pal cities, ethnic Kazakhs remain a minority: 40.9 percent of the population in Astana, 38.5
percent in Almaty, 36.0 percent in Kokchetau, 13.9 percent in Petropavlovsk, 7.5 percent in
Rudny, 48.8 percent in Semipalatinsk, 11.8 percent in Temitrau, 35.5 percent in Uralsk, 18.5
percent in Ust-Kamenogorsk, 48.7 percent in Shymkent, and 37.4 percent in Ekibastuz (Per-
vaia natsional’naia peripis’ naseleniia, 1999).
12. Statistics show a steady decline in the birthrate: during the period 1970–1975, it was
3.3 (births per woman); for 1980–1985, 3.1; and for 1993–1998, 2.0 (World Bank, 2000
World Development Indicators).
13. Agence France-Presse, March 17, 1999.
14. Vitkovskaya, Emigration, p. 13.
15. Some 175,000 Russians left Kazakhstan in 1992; 170,000 in 1993; 283,000 in 1994;
162,000 in 1995; 121,000 in 1996; 175,000 in 1997; 144,369 in 1998; 91,742 in 1999; and
185,371 in the first eleven months of 2000 (Shelgunov, “Flight from the Oasis”). The 1999 offi-
cial figure is from “Migratsia naseleniia Respubliki Kazakhstan za 1991–1999 gody,” as pub-
lished on the ASTEL’s Internet web site: <www.asdc.kz/kazstat/111/migr.htm>. The figures for
2000 are from Interfax-Kazakhstan as reported by Justin Burke of Eurasia.net in Kazakhstan
Daily Digest, January 23, 2001.
16. Sabit Jusupov, commissioned research, 1995.
17. Rossiiskaia gazeta, April 23, 1997, p. 7.
18. In 1997, 11,582 Kazakhs immigrated to Kazakhstan, while 11,759 left; in 1998, 10,955
immigrated, and 9,270 left (“Perepis’ Naseleniia 1999,” Kazakhstan Government Statistical
Report, 1999).
19. This figure was reported by Zauytbek Turysbekov, the director of the state’s migration
and demography agency, and quoted in Itar–Tass, December 12, 1998, as translated in FBIS
Daily Report, TEN–98–346, December 15, 1998.
294 | Notes to pages 176–183

45. I am choosing to use the term clan for the sake of continuity rather than to engage in
the current social science debate over how to best describe these subethnic lineage identities
in tribal (or segmented) societies.
46. See Schatz, “The Politics of Multiple Identities,” pp. 489–506.
47. Contributed by Timothy Soggs, private Internet web site: <http://members.
spree.com/sip/ananias/>.
48. Syzdyk Abishev died in 1997 after suffering a head injury while on vacation in Turkey
with Nazarbayev. He served as the first deputy trade minister of the Kazakh SSR from 1983 to
1988, as the general director of the republican self-financing amalgamation under the Kazakh
SSR Council of Ministers from 1988 to 1990, and as the minister of external economic rela-
tions of the Republic of Kazakhstan from 1990 to 1994, working closely with President
Nazarbayev.
49. “Ethnic Relations in Public Opinion,” 1996, unpublished research.
50. From 1938 to 1986 Kazakhstan had eight ethnic Russian first secretaries and only two
who were ethnic Kazakh, Z. Shaiakhmetov and D. Kunayev. See Olcott, The Kazakhs, pp.
199–224.
51. Vitaly Khlyupin, “Kazakhstan’s Zhuzes: Tribalism of the Twenty-first Century,” published
on the Internet web site Eurasia: <www.eurasia.org.ru/book/sbornik23.html>.
52. See Nurbulat E. Masanov, “The Clan Factor in Contemporary Political Life in
Kazakhstan,” Prism, vol. 4 (February 6, 1998).
53. Shelgunov, “Flight from the Oasis.”
54. Akhmetzhan Yesimov was named the first head of the State Investment Committee and
the first deputy prime minister. Yesimov lasted until February 1998, when he was appointed
head of the presidential administration. He then served as Kazakhstan’s ambassador to Belgium,
where he is said to have interested himself in the Tractebel transaction scandal (discussed here
in chapter 5) and then was briefly named the mayor of Almaty. After heading the Kazakh mis-
sion to NATO, he was appointed the minister of agriculture. Nurtai Abykayev was the direc-
tor of the National Security Committee but was dismissed to the reserves in the wake of a
scandal that developed after Kazakhstan illegally delivered forty MiG–21 fighter aircraft to
Pyongyang, North Korea. See Khlyupin, “Kazakhstan’s Zhuzes.”
55. Vrichkina, “Otkrovennoe Khanstvo.”
56. The republican headquarters for the struggle against organized crime and corruption
was established on April 28, 2000.
57. “Kazakh Regional Security Chided for ‘Repressive’ Measures against Corruption,” Khabar
televisions, May 28, 2000, as reported by BBC Monitoring Central Asia Unit, May 29, 2000.
58. Zakaeva and Sarsenbayeva, “Mezhetnicheskie Otnosheniya.”
59. See Alekseenko, “Migratsionnoe dvizheniie kazakhov.”
60. Economist Intelligence Unit, April 10, 2001.
61. Huttenbach, “Whither Kazakhstan?” p. 583.
62. Rowland, “Urban Population Trends,” p. 543.
63. FBIS–SOV–95–127, 3 July 1995, p. 71, as translated from Kazakhstanskaia pravda, June
23, 1995.
64. Elena Brusilovskaya, “Stanem novoselam i ty, i ya. Vas zdes’ ne zhdut,” AiF, no. 21 (261).
65. Zauresh Zaitova, “Problems of Regional Development in Kazakhstan,” Kazakhstan
News from the Globe, May 18, 2001.
296 | Notes to pages 191–198

66. These economic figures are from Jusupov’s report, “Analiz predposylok.”
67. Sabit Jusupov, “Otchet po teme analiz predposylok sotsial’nykh konfliktov v Kaza-
khstane,” commissioned research, unpublished, 1997.
68. See appendix 5 for more details.
69. Local authorities meet 78.9 percent of the expenditures for education versus 21.1 per-
cent by the republic, 83.5 percent of health care, and 13.8 percent of social security and wel-
fare. The latter burden was shifted to the central authorities when the pension system was
changed.
70. VAT is an indirect tax on consumer expenditure, charged and collected at each stage of
the production process and at the point of sale. In 2001, the VAT was reduced from 21 to 16
percent in an effort to give people an incentive to pay it.
71. The exact same pattern is found in the collection of VAT as well (see International Mon-
etary Fund, Republic of Kazakhstan, p. 45.
72. S. Zhusupov and K. Ezhenova, Dinamika obshchestvennykh, protsessov v Kazakhstane,
Almaty, 1997, p. 43.
73. “Crime Up in Southern Kazakhstan in the First Quarter of 2000,” Interfax, May 6,
2000.
74. “Security Service Sums up 1999 Results,” Interfax-Kazakhstan, January 14, 2000.
75. Cummings, Kazakhstan: Centre-Periphery Relations, p. 20.
76. Ibid., p. 9.
77. Interfax Central Asia, May 13, 1999.
78. For more on the rural-urban divide in Kazakhstan, see Cynthia Buckley, “Rural/Urban
Differentials in Demographic Processes: The Central Asian States,” Population Research and Pol-
icy Review, no. 17 (1998), pp. 71–89.
79. Karavan, February 1, 1997, as translated in FBIS Daily Report, SOV–97–062, April
2,1997.
80. “Zvezda-konechnaya vstrecha sostoyalas,” Zvezda irtysha, December 2, 2000.
81. See appendix 3.
82. For more on the economic dynamics in such places, see Rama and Scott, “Labor Earnings.”
83. UN Development Program, Human Development Report: Kazakhstan 1999 (Almaty:
UNDP, 2000), p. 39. Poverty is particularly acute in the oblasts of South Kazakhstan (pop.
1,976,689) and Zhambyl (pop. 983,935).
84. Savin and Alekseenko, “Problemi emigratsii v Yuzhnom Kazakhstanie.”
85. Rossiiskaia gazeta, April 12, 1994, p. 6.
86. The 1999 census revealed that Almaty city was one of the few areas of Kazakhstan that
had experienced population growth; currently there are 1,071,927 residents in Almaty, 105.4
percent of the 1989 population (Kratkie Itogi Perepisi Naseleniia 1999 goda v Respublike
Kazakhstan, Almaty, 1999, p. 6).
87. Andrei Zhdanov, “Kochevie v pol’zu gorodov,” Karavan, May 29, 1998.
88. The figures are taken from national statistics and direct communications from national
statistical offices to UNECE secretariat, published in UN Economic Commission for Europe,
Economic Survey of Europe (Geneva: UNECE, 2000), p. 230.
89. “Kazakhstan,” Economist Intelligence Unit Report, April 10, 2001.
90. Shelia, “Snow Leopard,” p. 7. An article in Pravda said that one million people were
unemployed in Kazakhstan, as compared with the official CIS number of 257,000 registered
Notes to pages 198–203 | 297

at unemployment offices. Aleksandr Pavlov, “The Temperature of Public Life in the CIS,”
Pravda, April 23, 1998, as translated in FBIS Daily Report, SOV–98–128, May 12, 1998.
91. Kazakhstanskaia pravda, July 2, 1996.
92. European Commission, Kazakhstan Economic Trends, April–June 1998 (Brussels: Euro-
pean Commission, 1998), p. 90.
93. Kazakhstan’s population aged fifteen to sixty-four increased from nine million in 1980
to eleven million in 1996. See World Bank, 1998 World Development Indicators (Washington,
D.C.: World Bank, 1998), p. 51.
94. Globe, December 23, 1998.
95. United States-Kazakhstan Council News Wires, August 15, 1998.
96. NTV, February 20, 1998, as translated in FBIS Daily Report, SOV–98–051.
97. Interfax Moscow, November 12, 1997, FBIS–SOV–97–316.
98. For an account of their joint meeting with Leonid Solomin, see “KSPK predlagaet vlas-
tiam mirnym uregulirovat’ situatsiiu s sudebnym protsessom nad zhanatastsami,” Panorama,
March 13, 1998.
99. Karaganda workers staged strikes in January and June of 1992 and threatened another
strike in February 1994.
100. Ekspress-K, January 18, 1995, p. 2, as translated in FBIS Daily Report, SOV–95–014,
January 23, 1995.
101. RFE/RL Newsline, July 16, 1997.
102. “Solomin Case Is Closed,” Union of Councils for Soviet Jews News, September 15, 1997,
as published on the UCSJ Internet web site: <www.uscj.com/stories/091597news.shtml>.
103. See U.S. Department of State, “Kazakhstan, 1999 Country Report.”
104. Itar–Tass, March 13, 1998, as translated in FBIS Daily Report, SOV–98–072.
105. Interfax Moscow, July 29, 1999.
106. UN Development Program, Poverty in Transition, p. 13.
107. The Organization for Economic Cooperation and Development defines Purchasing
Power Parity as currency conversion rates that both convert to a common currency and equal-
ize the purchasing power of different currencies. In other words, they eliminate the differences
in price levels between countries in the process of conversion. (Figures from UN Development
Program, Central Asia 2010, p. 172.)
108. Jamestown Monitor, November 19, 1997.
109. Central Intelligence Agency, Handbook.
110. CIS Interstate Statistical Committee, 1997: Statistical Yearbook, p. 317.
111. For all Kazakhstan, 34.6 of urban respondents and 38.2 of rural respondents reported
that they could not feed their families. See Alekseenko, “Migratsionnoe dvizheniie kazakhov.”
112. See Serdar Svas and G. Gedik, “Health Care Reforms in Central Asia,” in Central Asia
2010, pp. 144–61.
113. OMRI Daily Digest, April 2, 1996.
114. According to the Kazakhstan State Statistical Administration, the number of pediatric
beds dropped from 37,300 to 22,700 from 1995 to 1998, and the number of maternity beds
dropped from 16,500 to 10,500. Available at its Internet web site: <http://www.asdc.kz.kazs-
tat/new/zdrav.html>.
115. UN Development Program, Poverty in Transition, p. 215.
116. See especially Kazakhstanskaia pravda, May 31, 1995, p. 2.
298 | Notes to pages 203–208

completed the construction of a new synagogue and community center in Almaty, the Beis
Menachem Center.
148. For example, this view of Islam is found in a series of articles by K. Nurlanova that
define “the Kazakh national idea” (Nauka Kazakhstana, nos. 4, 6, and 8, 1994).
149. Panorama, May 28, 1994, p. 10.
150. Interfax, September 7, 1998, as translated in FBIS Daily Report, SOV–98–250.
151. RFE/RL Newsline, August 14, 1998.
152. On February 16, 1999, six explosions occurred simultaneously in Tashkent, concen-
trated around Independence Square, where key government buildings are located. These
explosions killed fifteen people and injured 130 but did not harm President Karimov, whom
many suspected was the target of the bombings. See Saradzhyan, “Bombs Shake Iron Rule.” In
the late summer of 1999, Islamic militants invaded Kyrgyzstan from Tajikistan, seizing villages
and taking hostages. The guerrillas planned to fight their way into the Ferghana valley of
Uzbekistan but were beaten back by Kyrgyz forces with CIS assistance. In August 2000, Islamic
militants entered Uzbekistan from Tajikistan and there clashed with Uzbek security forces.
153. Kazakhstan had a defense budget of $115 million in 2000. See the International Insti-
tute for Strategic Studies, The Military Balance 2000–2001 (Oxford, U.K.: Oxford University
Press, 2001), p. 171.
154. “Kazakhstan May Allow Overflights for Strikes on Afghanistan, TV Says,” BBC Moni-
toring, May 26, 2000.
155. One year later, Uzbek security forces were still alleging the existence of Islamic train-
ing camps in southern Kazakhstan, although the existence of such camps has yet to be proved
conclusively. See “Islamic ‘Guerrillas’ Training in Kazakhstan,” Mashhad Voice of the Islamic
Republic of Iran, January 15, 2000, translated as FBIS–SOV–2000–0115.
156. Institute of Development of Kazakhstan, “Uroven’ religioznosti.”
157. Aidosov, “Mirovozzrencheskie.” See also Talgat Ismagambetov, “Is Islamic Funda-
mentalism a Threat in Kazakhstan?” Prism, vol. 4, no. 7 (April 3, 1998).
158. U.S. Information Agency, Opinion Analysis, M–211–97, December 24, 1997.
159. When this question was asked again in 2000, 68 percent said that they favored sec-
ular law. U.S. Department of State, “Central Asians Differ on Islam’s Political Role, but Agree
on a Secular State,” Office of Research, Opinion Analysis, July 6, 2000, p. 5.

Chapter 7
Can Kazakhstan Regain Its Promise?

1. The homicide rate (per 100,000 people) rose from 15.7 in 1994 to 16.5 in 1997,
although statistics showed that the rate dropped to 16.3 in 1998 (UN Development Program,
Human Development Report: Republic of Kazakhstan, 1999, p. 60).
2. For more on the trade in illicit drugs in Central Asia, see Martha Brill Olcott and Natalia
Udalova Zwart, Drug Trafficking on the Great Silk Road: The Security Environment in Central Asia,
Carnegie Endowment Working Paper 11 (Washington, D.C.: Carnegie Endowment for Inter-
national Peace, 2000).
3. In July 1998, police officers in Almaty charged with extortion physically resisted arrest
by officers of the National Security Committee (Vladimir Akimov, “Kazakhstan: Kazakh Secu-
300 | Notes to pages 218–242

rity, Police Clash over Corruption Incident,” Itar–Tass, July 11, 1998, translated as
FBIS–SOV–98–192.
4. In April 2000, Nazarbayev accused Kazakhstan’s law enforcement agencies of resorting
to “sadistic” torture to extract confessions. See “Kazakhstan’s President Says Police Resort to Tor-
ture,” IPR Strategic Business Information Database, April 24, 2000. This problem is also referred
to in the U.S. State Department’s Human Rights Report for Kazakhstan for 2000.
5. See Richard M. Auty’s Sustaining Development in Mineral Economies: The Resource Curse
Thesis (London: Routledge, 1993); and Patterns of Development: Resources, Policy and Economic
Growth (London: Wiley, 1995). See also Karl, Paradox of Plenty. In addition, see A. H. Gelb and
Associates, Oil Windfalls: Blessing or Curse? (New York: Oxford University Press, 1988).
6. Stalin distinguished between nations, nationalities, and ethnic groups. Only the first,
which had complex economies, fixed historic territories (which abutted foreign countries in
every case), unique languages and cultures, and a population of significant size, were given their
own union republics in the USSR. Many nationalities received autonomous republics or, in
some cases, autonomous oblasts, which were of even more limited juridical status, while the
peoples were entitled to more limited forms of cultural protection.
7. For a list of companies and enterprises tied or allegedly tied to the Nazarbayev family,
see appendix 12.
8. UN Development Program, Human Development Report 1998, p. 10.
9. Jusupov, “Analiz predposylok,” p. 54.
10. In April 2000, a Russian An–12 military transport aircraft, which was the property of
Kazakhstan’s Infrakos state enterprise, left Baikonur, where it was to be taken to the Moscow
suburban town of Zhukovskiy as scrap metal. Instead, the plane ended up in the Congo,
where it was illegally sold. It is alleged that other military equipment from Baikonur has been
sold abroad, although precise figures for missing hardware are not available. See “Kazakh Mil-
itary Aircraft Sold to Congo as ‘Scrap Metal,’ ” BBC Worldwide Monitoring, April 29, 2000.
11. Nazarbayev’s middle daughter, Dinara Kulibayeva, heads Kazakhstan’s education fund,
named for her father.
12. In case of the death or incapacity of the president, his term shall be completed by the
presiding officer of the senate, according to Article 48 of the constitution.
13. International Monetary Fund, Statistics Yearbook 2001, pp. 220–21.
14. Moscow Interfax, December 8, 1992, as reported in Daily Reports Central Eurasia,
FBIS–SOV–92–236, Dec. 8, 1992, p. 36.
15. ABV, 30 May 1994, p. 6.
16. Nezavisimaia gazeta, June 29, 1993, p. 3.
17. See International Institute for Strategic Studies, The Military Balance 2000–2001 (Oxford,
U.K.: Oxford University Press, 2000), p. 164.
18. See appendix 7 for U.S. and international aid and assistance projects in Kazakhstan.
Selected Bibliography

Martha Brill Olcott, a specialist in Central Asian and Caspian affairs and
inter-ethnic relations in the Soviet successor states, joined the Carnegie
Endowment in 1995. She is also a professor of political science at Colgate
University. Ms. Olcott co-directs the Carnegie Moscow Center’s Project on
Ethnicity and Politics in the former Soviet Union, which organizes seminars,
conferences, and publications on problems of state building in multi-ethnic
Soviet successor states and on regional and ethnic conflicts within Russia.
She has previously served as a special consultant to Acting Secretary of State
Lawrence Eagleburger and as director of the Central Asian American Enter-
prise Fund.
Ms. Olcott received her graduate education at the University of Chicago
and has been a member of the faculty at Colgate University since 1975. A
prolific author on Central Asian affairs, her books include Getting It Wrong:
Regional Cooperation and the Commonwealth of Independent States, co-
authored with Anders Åslund and Sherman Garnett (Carnegie Endowment,
1999); Russia After Communism, edited with Anders Åslund (Carnegie
Endowment, 1999); and The Kazakhs (Hoover Institution Press, 1987, and
2nd ed. 1995).

321
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